1 Wednesday, 30 November 2022 2 (10.00 am) 3 MS KENNEDY: Good morning, chair. 4 SIR WYN WILLIAMS: Good morning. 5 MS KENNEDY: Chair, our first witness today is Mr Colin 6 Baker. 7 COLIN HERBERT BAKER (sworn) 8 Questioned by MS KENNEDY 9 THE WITNESS: Good morning, Mr Chairman. 10 MS KENNEDY: Mr Baker, you should have there in front of you 11 a copy of your witness statement. Do you have that 12 there? 13 A. I do. 14 Q. If you turn over to the last page, is that your 15 signature there? 16 A. It is. 17 Q. Have you read through this statement recently? 18 A. I have. 19 Q. Is it true to the best of your knowledge and belief? 20 A. It is indeed. 21 Q. That statement is now in evidence in the Inquiry. 22 Everything that I ask you now will be supplementary, and 23 can I begin by thanking you for coming to give evidence 24 to the Inquiry here today. I'm going to start by asking 25 a few questions about your background. You started as 1 1 a subpostmaster in 1968 in the head office in 2 Stoke-on-Trent; is that right? 3 A. Yes, it's not actually a head office; it's a Post Office 4 in Birches Head in Stoke-on-Trent. 5 Q. After that, you then joined your local branch -- or at 6 that time you joint your local branch of the National 7 Federation of SubPostmasters? 8 A. I did, yes. 9 Q. Then you became involved in the North Staffs branch; is 10 that right? 11 A. Correct. 12 Q. Then you applied for a full-time position as Assistant 13 Secretary at HQ? 14 A. Yes, I did. 15 Q. That involved moving to Sussex; is that right? 16 A. Yes, indeed, with my wife and two girls. Not very 17 popular man at the time, I assure you. 18 Q. Then in 1986, you were appointed Deputy General 19 Secretary of the Federation? 20 A. Yes. 21 Q. Then you went on to become Deputy General Secretary in 22 1988 -- 23 A. Yes. 24 Q. -- and General Secretary in 1999; is that right? 25 A. That's correct. 2 1 Q. You say in you statement -- and if we could pull that 2 up, please, it's WITN03780100, and if we could turn to 3 page 3 please. Looking at paragraph 7, you say there 4 that you felt during your tenure this coincided with 5 a period of great change at Post Office Counters. Could 6 you explain what you meant by that, or a bit more? 7 A. Yes. I'd love to. Coming from a position of being 8 a subpostmaster, sort of trading on your own, and in 9 your Post Office, and that was the beginning and end of 10 your world, as it were. And the cash account was 11 primary among them all. And moving to Federation 12 headquarters I realised there was a much bigger world 13 around subpostmasters than what I thought it was, and 14 that world, I felt, was changing because I got to know 15 the Benefits Agency were part of it, part of the change, 16 Post Office Counters were clearly the prime movers in 17 the change, there were other people in the Post Office, 18 other unions, et cetera, and the feeling I had at the 19 time was that if we didn't change to meet the challenges 20 ahead, we probably wouldn't be there for very much 21 longer. 22 I thought that it was a far more dynamic world than 23 I was used to, and that's what I meant by that, that 24 suddenly we were thrust into another type of world, as 25 it were, a world of economics, a world of automation, 3 1 computers, et cetera, so much more than I ever thought 2 possible at the time. 3 And so I realised that I had to come out of this, 4 that sort of mental feeling of what post offices and sub 5 post offices were, and where they fitted into this great 6 big new world I was suddenly thrust into. 7 Q. One of the key issues was that the Benefits Agency 8 wanted to start making payments into individual bank 9 accounts. Why was that potentially a problem? 10 A. Well, that was of the bread and butter, really, of 11 a Post Office, a sub post office, anyway, that if you've 12 ever witnessed outside a post office on a Monday morning 13 or a Thursday morning, because they did what they call 14 peak smoothing for payment of benefits at the time. It 15 started on a Monday and then they moved to Thursday, 16 then it moved back to Monday again. There would be 17 queues outside the post office, no matter if it was 18 raining, snowing or whatever, they were queueing for the 19 post office to open and that queue was there nearly all 20 day. 21 Obviously, we used to work hard to try to serve them 22 quickly and get them back home but it was the bread and 23 butter, that was the actual -- the basis of, really, 24 subpostmasters like myself becoming a subpostmaster, one 25 because you served the public and you like the focal 4 1 point within the village and you can imagine Birches 2 Head was not that big so you become the focal point 3 within the village and also serving the customers and 4 that was where you derived your income from. 5 Your post office pay was based on the number of 6 transactions you did, and those -- the majority of those 7 transactions at the time were pensions and allowance 8 payments. 9 Q. Did you feel at the time that post offices could survive 10 the BA withdrawing that line of work? 11 A. Not unless it was addressed. If we just sat there and 12 said "Well, okay, it's going", then we would go with it. 13 But I felt at the time, and I mentioned -- make the 14 point in my statement, that we needed -- we've got to 15 address this. This is something we've got to address. 16 And I was General Secretary at the time -- I think I'm 17 right in saying I was General Secretary at the time -- 18 and I felt the onus was on me to do something about it 19 because as individual subpostmasters, far flung, 20 ubiquitous, but you don't really know your mate you 21 know, because it's not like a workshop union, they were 22 individuals. 23 I felt the onus was on me and the Federation and 24 I took it very seriously that we've got to address this, 25 and that became my life's work. 5 1 Q. At the time before Horizon was introduced, you would 2 have been aware that subpostmasters could be prosecuted 3 by the Post Office? 4 A. Oh, yes. 5 Q. Also before Horizon, you would have been aware that 6 subpostmasters or the Post Office could seek to recover 7 losses from subpostmasters? 8 A. Yes, that was all in the subpostmasters' contract that 9 they signed for the Post Office and with the Post 10 Office, yes. Oh yes. 11 Q. Turning to the beginning of the development of Horizon, 12 the NFSP and you were involved from the beginning when 13 Pathway was announced as a chosen contractor; is that 14 right? 15 A. That's correct. 16 Q. If we turn up a minute from 5 September 1996, that's 17 NFSP00000120. If we could scroll down, please. This is 18 a letter from you to Executive Officers in 1996? 19 A. Yes. 20 Q. You say: 21 "Further to the meeting at Pathway on 23rd July you 22 will recall that we were keen to establish the 23 Federation as a partner with Pathway and part of the 24 formal development of the automation platform and its 25 introduction into the network. 6 1 "I am sure you will be pleased with the attached 2 letter which sets in train the first stages of that 3 formal relationship. We will report further 4 developments in due course at which time we hope to have 5 a clearer understanding of the possible involvement of 6 Executive Officers and, indeed, Branch Secretaries. 7 "You will also be interested to know that I have had 8 a meeting with the company who are going to be training 9 Sub-Postmasters. We have agreed to continue that 10 relationship as training will be very important as it 11 becomes linked to the rollout programme." 12 If we turn over the page, and scroll down, this 13 a letter from Paul Rich at Pathway to you, from 14 4 September 1996 and if we look at paragraph 2, it says: 15 "First, on more strategic issues, I will keep you in 16 touch, on a personal basis, with overall progress, 17 including an understanding of any critical political and 18 commercial dimensions." 19 So from the very beginning, you have personal 20 contact with Pathway and you're seen as the contact 21 person at the NFSP; is that right? 22 A. I was certainly the contact person in the NFSP, yes. 23 The relationship -- I think you said this was authored 24 by Paul Rich? 25 Q. Yes, we can see this if we turn over the page. 7 1 A. I think Paul Rich worked for the Post Office, not 2 Pathway, didn't he? Or at least when I knew him. 3 Q. Oh, my apologies. You're right he did work for Post 4 Office but this is being point person in relation -- 5 A. Oh yes, me and the rest of the people in Federation 6 Headquarters of course, but I would be the letterbox. 7 Q. He was personally in contact with you? 8 A. Yes. 9 Q. If we turn over to a circular from 25 September 1996 10 that's at NFSP00000035. This is a circular that you 11 wrote to the National Executive Council, and if we 12 scroll down, this is talking about the Initial Go Live, 13 isn't it? 14 If we look, it says: 15 "I am sure you will be interested in the attached 16 correspondence which is information regarding the 17 progress of automation from the original ten offices 18 previously advised to you [in] the next phase of a live 19 trial." 20 If we look down at the fourth paragraph, it says: 21 "It is planned to launch the system publicly when 22 the remainder of the ten go live in October. This will 23 clearly help us with our publicity as the first office 24 was not a member. Whilst we had asked BA/POCL to hold 25 off their publicity until a Federation member was 8 1 involved in the trial, the lack of a public announcement 2 was probably due to the forthcoming Conservative Party 3 Conference and not because Leonard Stanley Post Office 4 was not a member of the Federation. An article is being 5 prepared for the next edition of the journal to provide 6 members with additional information." 7 We can see here that already you're looking to 8 publicise the NFSP's involvement in the automation 9 process; is that right? 10 A. That's correct but it's not entirely the story. I did 11 have an executive council and branch secretaries and 12 members that wanted to see what the Federation was 13 doing. So it was far better, in my view, for them to 14 read it -- not from my source -- from other sources -- 15 than for me to tell them. So in part it was that. Yes, 16 it was beating the Federation's drum, of course, which 17 I thought was my job. 18 Q. Did you feel at that stage that you really needed to 19 push to get the project over the line for the benefit of 20 your membership? 21 A. Yes, and that didn't stop there either. I had that 22 feeling right until I finished. 23 Q. The NFSP had a negotiating committee; is that right? 24 A. Yes. 25 Q. Can you tell us a bit about what the negotiating 9 1 committee involved? 2 A. Yes, they were all subpostmasters, they were all 3 Executive Officers. So when you see there I'm writing 4 to "Dear Executive Officer", they'd be included in that. 5 But they were a close team for me and we used to 6 negotiate pay and conditions of service for 7 subpostmasters and the negotiating committee were 8 clearly involved in that. But so was I. So they were, 9 if you like, my close committee to help me to form 10 opinions and make decisions, and negotiate. 11 Q. If we could turn to a meeting minute, NFSP00000560. You 12 can see there this is the report of the meeting of the 13 Negotiating Committee. 14 A. Yes. 15 Q. If we could turn over to page 7, please, this is the 16 section that deals with counter automation, and it says: 17 "The General Secretary reported he had visited 18 Newcastle on 27th and 28th May in the company of Paul 19 Rich and John Bennett in which area OBCS was being 20 installed in 100 Sub Post Offices. The reach from 21 Sub-Postmasters was of delight." 22 Do you remember that meeting in Newcastle? 23 A. I do, yes. 24 Q. Can you describe what it was like? 25 A. Well, it was in room not dissimilar to this, not quite 10 1 so big, and there were subpostmasters in the audience. 2 Paul Rich and myself, and I think there was someone else 3 there as well. And we tried to stem any fears that the 4 audience might have had and to make sure that they were 5 on side, as far as the development of this was 6 concerned. But we didn't have anything to do with the 7 actual equipment at that time. 8 Q. What fears did they have? 9 A. Fear of the unknown, I think, quite honestly, that their 10 post offices, by nature of being sub post offices, were 11 much smaller than what you'd imagine. Some of them were 12 quite tiny, and so they feared the disruption, they 13 feared computers. I mean, it was a little while ago 14 before everybody had -- well, they might have had 15 a mobile phone but that was about it. 16 So there were fears -- fear of the unknown, fear of 17 automation, fear of their post offices being disrupted, 18 fear of not being able to look at the customer when they 19 were serving them. That sort of thing. And they needed 20 to vent, to be honest with you. And part of my style, 21 I think, is to allow people to vent and then we can 22 allay any concerns that they might have. 23 Q. So when it says there "The reaction from Sub-Postmasters 24 was of delight" -- 25 A. Yes, it was. 11 1 Q. -- what's that in reference to? 2 A. They were pleased that, at last, they were going to get 3 some counter automation and some backing and some 4 recognition. They were delighted. 5 Q. So they were delighted and fearful at the same time? 6 A. Delighted at the decision that had been made to automate 7 their post offices and fearful of what that really 8 meant. 9 Q. The note goes on to say: 10 "The action points from the meeting were circulated 11 (copy attached)." 12 If we turn over to page 21, we can see these are the 13 action points, and there's a list of them. 14 A. Yes. 15 Q. If we could turn over to the next page, which is 22, and 16 third bullet point down, it says: 17 "Subpostmasters not reporting all systems errors -- 18 distorting error rate figures." 19 Can you explain what is meant by that? 20 A. Well, I can try to remember what was said. I think that 21 the problem is one well known to me, and that is 22 subpostmasters working for the Post Office, if they had 23 a shortage, knowing that in their contract they had to 24 make good shortages -- that was what they were 25 contracted to do -- that they didn't always report them. 12 1 They would just make good the sums, and move on. 2 But, of course, with the automation system, the 3 Horizon System, they needed to report it, and that was 4 the change. Because before, it was their Post Office, 5 their cash account, they were responsible for the funds, 6 they knew that, and so they didn't always report 7 shortage of, say, £1 or £2 or £3. They put the money in 8 because next week they might have been £2 or £3 over, 9 and so that was the relationship they had with the cash 10 account and, therefore, that's why they wouldn't have 11 been reporting. They were not used to reporting every 12 error. 13 Q. So, at this stage, it was known that the sums showing on 14 Horizon, subpostmasters would be required to account for 15 those figures? 16 A. Yes, oh yes. That's a contractual thing. 17 Q. How did you feel about the system at this stage? We're 18 in 1997. 19 A. Well, the system was one I grew up with -- 20 subpostmaster, not long since I stopped being 21 a subpostmaster -- and it was well accepted by 22 subpostmasters that they made good shortages when they 23 arrived, and so -- and I can tell you that I've spent 24 many hours -- we used to balance on a Friday night 25 then -- I've spent many hours on a Friday night trying 13 1 to find money that wasn't balancing but, eventually, 2 you've got to go through, you've got to count every 3 stamp and every pension. You've got to get -- really, 4 really ground everything within your Post Office, and 5 that's how you reached a balance. And if you did miss 6 something when you were counting the stock, then you'd 7 have a misbalance, and so you've got to keep working 8 until you've found a balance. 9 Q. So at this stage, you were already flagging up to 10 subpostmasters that they really must report errors 11 because they'll be held accountable for them? 12 A. No, not that specific, not that specific at all. 13 I mean, I didn't recognise at that time that the fact 14 that they weren't reporting all shortages was going to 15 be -- well a heinous thing. I, in my innocence, thought 16 that the relationship that the subpostmaster had with 17 the cash account was still the same. I know it was 18 automated but it would still be his Post Office and the 19 money that he's responsible for. So, no, I didn't see 20 it in quite the light you've just described. 21 Q. There were delays with the Horizon project, weren't 22 there? 23 A. There were. 24 Q. Did you find those frustrating? 25 A. I did. 14 1 Q. If we could turn up a meeting minute from the National 2 Executive Council, NFSP00000461. This is in March 1998, 3 and if we turn to page 17, and if we can scroll down to 4 the "Counter Automation" section, it says: 5 "The minutes of the Negotiating Committee reflected 6 the situation which existed at the time. There had been 7 a great deal of press speculation about the future of 8 the Horizon Platform and that speculation was growing." 9 What were the press saying at that time? 10 A. I think the press were saying that it was doomed. That 11 they'd never seen a successful PFI in their life and 12 this was another one that was going to go down the 13 tubes. Basically saying that. They didn't quite use 14 that language. 15 Q. "Intelligence sources are still saying that the Benefit 16 Agency would like to be disengaged from the project and 17 concentrate on ACT and an updated ALPs style of fraud 18 detection. Everyone in Post Office Counters, the 19 Corporation and ICL Pathway were involved in keeping the 20 Government interest in Horizon and the Federation was 21 fully involved with all those and the DTI. The news 22 that John Denham MP would be at Conference was 23 an excellent signal of commitment and his interest must 24 be maintained. 25 "The General Secretary commented the press reports 15 1 were predominantly true, with Government Computing 2 containing leaks from the Benefits Agency." 3 What was morale from the subpostmasters like at this 4 time? What were you hearing on the ground? 5 A. Um ... I can't really remember the comments from 6 subpostmasters. I mean, they were many and varied. The 7 morale certainly around me at the time, was one of 8 disappointment, because we really needed this 9 automation. I think that, hopefully, it comes through 10 in spades. We really needed it. And I was disappointed 11 that the speculation of our people writing magazines and 12 novels, that it was in peril, and I was really, really 13 disappointed with that. 14 I spent a great deal of time trying to find out 15 precisely what the situation was but I was never allowed 16 close to Pathway and Fujitsu. I was always told, you 17 know, everything's okay. 18 Q. You said you went to a great deal of effort. Who were 19 you speaking to and what channels did you use? 20 A. I'd speak to anybody, go anywhere, and use any channels 21 to find out, and that did take a lot of time and energy. 22 But, predominantly, Post Office Counters Limited, who 23 always reassured me, and I'm sure that's what they 24 thought at the time. I don't think they were just 25 purposely misleading me. And I was reading newspapers 16 1 and I got a research officer at Shoreham who was also 2 reading. We were keeping -- trying to keep an eye on it 3 because this was clearly very, very important for us, 4 and what I didn't know at the time was just how many 5 people were involved in this decision and how many 6 people were involved in bringing it -- bringing the 7 automation to market. I was amazed to find out, and 8 a lot of it with this hearing. 9 Q. You also made press releases in support of the project, 10 in response to some of the press coverage. If we could 11 turn up NFSP00000280, and if we could turn on to 12 page 4., it says: 13 "The National Federation of SubPostmasters, which 14 represents 85% of the UK's army of Sub-Postmasters has 15 criticised the media obsession of denigrating the 16 Horizon/automation project, the system which will 17 automate all post offices to provide benefits payments 18 and banking services in the future. 19 "General Secretary, Colin Baker, acknowledged that 20 press speculation was inevitable, particularly with the 21 Treasury Review now reaching a critical stage. 22 Nevertheless, this most recent speculation was now 23 causing concern amongst Sub-Postmasters. Mr Baker 24 reminded everyone that the Minister for Welfare Reform, 25 Mr Frank Field MP, had not only sent his PPS, Kate Hoey 17 1 MP, to our Annual Conference to report good news for the 2 network, but had followed it up with a letter confirming 3 key points." 4 So you were publicly defending the project at this 5 stage in 1999; is that right? 6 A. Let's be specific on this one. I was publicly defending 7 the principle of automation in post offices. I wasn't 8 publicly defending Pathway or anybody else. It just 9 happen to be Pathway, but that was not my choice. 10 Q. But at this stage, you said you put a lot of effort in 11 tying to get to the bottom of what was gong on -- 12 A. Yes. 13 Q. -- and you were being neglected and people weren't 14 engaging with you; isn't that right? 15 A. No, I think they did. I think they did engage with me. 16 They might have been saying what they thought I wanted 17 to hear, and I can't speak for them, obviously, but 18 I don't think I was ignored, as such. I think I might 19 have been held at arm's length, as it were. 20 Q. Because it would have been a problem for the Post 21 Office, wouldn't it, if the Federation turned against 22 the Horizon project? 23 A. Oh yes, it would have been a problem for subpostmasters 24 as well. 25 Q. Because the Post Office had an interest in ensuring that 18 1 it continued to have your support, precisely because you 2 would release press releases like this; isn't that 3 right? 4 A. Yes, I think the Post Office sometimes wondered what was 5 I doing, what was I about. But on this occasion we 6 happened to be on the same plane. 7 Q. You were part of the Horizon Working Group in 1999 -- 8 A. Yes. 9 Q. -- and you were invited to join this group by Sir Ian 10 McCartney. If we could turn up NFSP00000064. If we 11 could look at the second paragraph -- or rather, sorry, 12 the first paragraph: 13 "You will know that following the recent agreement 14 in principle with ICL on completing project Horizon in 15 a restructured and simplified form, the Secretary of 16 State asked me to set up a small working group of key 17 players to help ensure that the project is now taken 18 forward in a positive and decisive way to a successful 19 conclusion. 20 "I have decided to invite four organisations to be 21 full members of the Horizon Working Group, namely the 22 Post Office, the Communication Workers Union, the 23 Communication Managers Association and the National 24 Federation of SubPostmasters. Clearly we need 25 a dialogue with other organisations including ICL, the 19 1 Department of Health and Social Security, the Benefits 2 Agency and the Treasury, but I have not thought it 3 appropriate to include them as full members." 4 Then if we scroll down, we can see that there are 5 three -- he proposes that the group's work would fall 6 into three main areas. So, firstly: 7 "... there are the negotiations between POCL and 8 ICL, and between POCL and BA, that need to take place 9 over the next few weeks to put in place the detailed 10 contractual arrangements that will give effect to the 11 outline agreement reached on 24 May. I see a role for 12 the Working Group in carefully monitoring these 13 negotiations and in addressing and helping to resolve 14 any sticking points that may be encountered. 15 "The second area covers the remaining development 16 phases of Horizon, including large scale live trials, 17 system acceptance, and rollout of the system smoothly 18 and in a timely fashion to all offices within the 19 network followed by the migration from paper-based 20 methods of benefit payment to ACT-based payments 21 accessible at post offices. I believe that the Working 22 Group could provide a valuable forum for bringing 23 pressure to bear when needed for seeking solutions to 24 any problems that may arise." 25 If we can go on: 20 1 "The third area concerns the commercial exploitation 2 of the very considerable potential which the Horizon 3 platform will offer once in place. The combined 4 experience of the Working Group should prove a valuable 5 source of ideas and contacts for business opportunities 6 and future revenue streams." 7 Does that reflect what you saw the Horizon Working 8 Group to have been set up to achieve and is that how you 9 found the meetings? Did it cover those areas? 10 A. It certainly -- I agreed with what it was designed to do 11 or what it was put in place to do. We didn't, as far as 12 I'm aware, anyway, get involved in the negotiations 13 between Pathway and the Post Office and anybody else for 14 that matter. But we did certainly inject ideas 15 regarding the future and how to use the Horizon platform 16 or how we wanted to use the Horizon platform. That was 17 most definitely that -- and we also had a say in the 18 type of publicity which the Benefits Agency were putting 19 out, because it was clear from that point that the 20 Benefits Agency didn't particularly want Post Office 21 automated. 22 Q. Did you see your role as providing feedback on the 23 Horizon system itself? 24 A. Not in that committee, no. We certainly did feed back 25 to the Post Office, to Post Office Counters Limited, 21 1 about the Horizon platform, and we did that a lot, but 2 I can't -- I genuinely can't recall whether that forum 3 was one that took on board our comments regarding the 4 operation of Horizon. 5 Q. When Mr Sibbick gave evidence to this Inquiry he said 6 that this was designed as a channel for feeding back 7 from subpostmasters on the system. Would you accept 8 that? 9 A. It might have been set up to do that. I don't think it 10 did. 11 Q. It didn't because you didn't raise those issues, or 12 because they weren't interested in discussing them? 13 A. It was at a higher level. I think, anyway -- this is 14 going back a little while -- I think that it was 15 discussing things on a higher level than what 16 subpostmasters at the time were feeding to me, which 17 was, you know, the scales don't work, there's lots of 18 dropouts for the screen. That type of thing, that they 19 were experiencing their problems in their post offices, 20 wasn't the right -- or didn't appear to be the right 21 forum to have been having those sort of discussions. 22 Q. What would have been the right forum? 23 A. The forum I was using, which was I went to the Post 24 Office and spoke to them at length about it, and 25 reported it, and, you know, anyone that -- anyone would 22 1 listen. 2 Q. If we could look at BEIS0000345. Yes, that's the one. 3 Thank you. This a steering brief from David Sibbick, 4 and if we turn over to page 2, this is from 7 June 1999, 5 and scroll down to paragraph 5, please. It says: 6 "The NFSP are likely to warn that fears about the 7 future viability of post offices will lead to further 8 loss of confidence amongst subpostmasters and post 9 office closures, especially in rural areas. They will 10 ask what the Government intends to do about the obvious 11 and very large funding gap that will open beyond 2003 12 with the progressive disappearance of the BA revenue, 13 against the repeated commitment by Ministers to the 14 nationwide network of post offices. Given the lack of 15 Ministerial consensus on the way forward on this issue 16 the answer has to be that we look to the members of the 17 group to work together to maximise the very great 18 commercial potential of the Horizon platform, but that 19 the Government will be discussing the longer term 20 viability of the network with the Post Office in the 21 context of the Strategic Plan." 22 Was that your position at the time, that you were 23 fearful about the viability of post offices? 24 A. Yes. 25 Q. Again, this was partly because of the disappearance of 23 1 BA funding? 2 A. Yes, as I've explained, this was a fundamental part of 3 the daily life of a subpostmaster. 4 Q. In your mind, this was the key issue at the time -- 5 A. Yes. 6 Q. -- to raise with the Government? 7 A. Yes, yes. At the time. 8 Q. Did you feel that this was a particularly difficult 9 time? 10 A. It was. In fact, I had some meetings with the Benefits 11 Agency people themselves and, suffice to say, they were 12 brutal negotiators. They really didn't want this 13 through Post Offices and they made that very clear. We 14 really, really did, so you can see we didn't see eye to 15 eye very often. 16 Q. If we could turn to NFSP00000026, please, and if we turn 17 over to page 2. This is a note of the meeting of the 18 Horizon Working Group on 8 June. I think this was the 19 first meeting, does that sound about right? 20 A. Yes. 21 Q. It records the issues that you raised. If we could 22 scroll down. If we look at paragraph 1, it states: 23 "Mr McCartney began by acknowledging that 24 negotiations on the Horizon project had been protracted 25 and difficult. He hoped that, following the 24 1 announcement on 24 May, the Working Group could keep 2 discussions on track for a successful agreement by 3 16 July. The Group would bring together various strands 4 and give political accountability. From the 5 Government's viewpoint there clearly needed to be more 6 effective monitoring and oversight of the project." 7 If we scroll down to paragraph 6, we can see that 8 you raise an issue at this meeting saying you had 9 "a fundamental point to raise". This was to do with the 10 wording of the second term of reference, "methods of 11 payment also accessible through post offices". It says 12 that you felt that that would send the wrong signal to 13 post office staff and subpostmasters: 14 "Where was the long-term protection for the 15 network?" 16 Was that a contribution that you remember making at 17 the -- 18 A. Yes, it was, yes. 19 Q. At this time, did you know that subpostmasters were 20 having difficulties with the Horizon project and that 21 there were difficulties balancing? 22 A. I wasn't -- I knew they had difficulties. They had 23 difficulties with, as I've mentioned before, screens and 24 dropouts, and all that type of trouble. And I wasn't 25 aware that there was a major -- which I am now, of 25 1 course, I fully accept -- and there was a major problem 2 with the balancing. And I think it's because of 3 something you asked me earlier on, which was the 4 contractual relationship and making good losses. 5 There has always been losses in post offices and 6 gains, I imagine, and so that was -- that bit there was 7 typical, I think, of the everyday working, and so that 8 didn't particularly draw my attention, I don't think, at 9 the time. But others did, and this was the Horizon 10 Working Group, if you remember, and what we were 11 discussing was Horizon, and the sort of thing that 12 happens with the -- the counter screen had to be moved 13 and all that sort of a thing. It was a real, real mêlée 14 of different things, of which that was one. But 15 I didn't attribute any great concern to it, because it 16 was always thus. What I didn't know then which I know 17 now, of course, was the scale of it. 18 Q. Do you accept that it was a mistake not to raise this 19 clearly in these Working Group meetings, these kind of 20 issues? 21 A. No, I don't think I do. I mean, it's a wise man who 22 knows what he doesn't know, and I didn't know what was 23 looming -- what was on the pot boiling. It was -- I was 24 going to say it's fundamentally -- I think what we're 25 talking about isn't that, is it? 26 1 Q. What, sorry? 2 A. Well, you're drawing paragraph 6 my attention. 3 Q. Yes, so essentially what I'm putting to you is you're 4 drawing issues out to do with the terms of reference. 5 A. Yes. 6 Q. This would have been an ideal time to say, "Well, 7 actually, leave aside the terms of reference, 8 subpostmasters are having real difficulties with using 9 this new project. It's a real problem". But you didn't 10 do that? 11 A. No, because, at the time, it wasn't a great issue. Now, 12 I fully accept it was boiling up to become one but, at 13 the time, it wasn't. We were talking about the terms of 14 reference, and the terms of reference -- there was the 15 Benefits Agency putting out a leaflet which said words 16 to the effect of "Oh, and you can always go to the Post 17 Office if you want to", it was promoting Automatic 18 Credit Transfer into people's bank accounts and all 19 I was doing in that meeting, at that point, was saying 20 to them "Just a minute, let's have a level playing field 21 if nothing else". 22 So that was really not related to counter losses and 23 the operation of Horizon by subpostmasters. That was 24 referring to that -- it was a high-level meeting. We've 25 got Ian McCartney and people in there like that. It was 27 1 referring to the terms of reference that were -- people 2 were going to follow as it went through. And my concern 3 at that point was, "Let's have a level playing field. 4 Let's not have Automatic Credit Transfer and just 5 mention subpostmasters en passant. That's what I was 6 about at that point. 7 Q. We can see further issues that you raise at this meeting 8 if we turn to page 4, and if we look at paragraph 11 and 9 12: 10 "On Mr Baker's point about long-term security for 11 the network, Mr McCartney pointed out that even the 12 benefit payment card would have been a relatively 13 short-term solution, which was never envisaged to have 14 a long-term future given the accelerating trend for the 15 new benefit recipients to opt for ACT. 16 "Mr Baker accepted Mr McCartney's point that the job 17 now was to secure the success of the platform, but 18 argued that the Post Office should be flagged up in the 19 terms of reference as the preferred port of call for 20 benefit recipients." 21 Was that your position at the time: that the job was 22 to secure the success of the platform? 23 A. Yes. 24 Q. This was despite the fact that you didn't have the 25 technical expertise to assess the viability of the 28 1 platform itself? 2 A. That's correct. I didn't have. But I put my trust in 3 the Post Office and others that did have the expertise, 4 or at least I hoped they had. They were the ones that 5 negotiated the contract, not me. But I did throw myself 6 and the Federation wholeheartedly behind it. Because 7 without automation, without that sort of counter 8 automation, we would be doomed, I'm sure. It was life 9 saving for us. 10 Q. What did you know at this time about the reasons why the 11 Benefits Agency had withdrawn from the project? 12 A. I don't think I, or anybody else on our side of the 13 dealings really knew why, other than it was a question 14 of how much it cost the Benefits Agency to push order 15 books through, the amount of fraud that the order books 16 attracted. That was what I thought. But I didn't 17 really know. 18 Q. Did you ask anyone at the time? 19 A. Yes, I asked the Benefits Agency. 20 Q. Moving forward slightly to the 10 June 1999, if we could 21 pull up NFSP00000479, this is another report of the 22 meeting of the Negotiating Committee, and if we could 23 turn to page 9, please; these is the start of the 24 discussion about counter automation. It seems like this 25 was a standing item on the Negotiation Committee at the 29 1 time. Would that have been right? 2 A. That's absolutely right yes. 3 Q. If we could turn over to page 12, please, and scroll to 4 the bottom. We can see that it's recorded: 5 "The General Secretary and-on Peberdy advised the 6 committee that they'd gone to the meeting with the 7 preconceived idea that attempts would be made to 'buy 8 them off' and placate them with platitudes. However, it 9 appears the government are worried about the extent of 10 the Federation's influence and it is our intention to 11 keep them worried. The Federation has a substantial 12 role in the Working Group and will be in prime position 13 to have as much influence as possible. The Minister is 14 under no illusion that the Federation intends to bide 15 its time and see what it is to be delivered before 16 taking any further action." 17 Is that what you said at the time? 18 A. Well, that's recorded in the minutes. I can't genuinely 19 remember what I said, but that's in the minutes so 20 I imagine, yes. 21 Q. Did you feel like the Federation could have 22 a substantial role in the Working Group and be 23 influential? 24 A. Yes. 25 Q. On this same page, if we look further down, it says -- 30 1 sorry, just scrolling down. 2 A. That's all right. I'll have a drink while you're doing 3 that. 4 Q. Please let me know if you need a break at any time? 5 A. Yeah. I'm fine, just thirsty. 6 Q. It says: 7 "Some subpostmasters have had enormous difficulties 8 balancing up and finishing their cash accounts, even to 9 the point of still struggling to finish on Friday 10 nights. 11 "Tomorrow's special Executive Council meeting, which 12 is being attended for a short time by Stuart Sweetman 13 and David Miller, is crucial to finding out what has 14 gone wrong with the Horizon programme. ICL Pathway/POCL 15 say it's not the system." 16 Do you see that there? 17 A. Yes. 18 Q. So, at this time, it sounds like a very serious issue 19 that subpostmasters are reporting enormous difficulties 20 balancing up. To you, was that business as usual or was 21 that new? 22 A. No, that's when we sensed that it was escalating. Hence 23 we got David Miller and Stuart Sweetman along to the 24 meeting to account for themselves, and for them to hear 25 for themselves what the Executive Council was saying. 31 1 Because we only -- we at Federation headquarters know 2 what the subpostmasters said to the branch secretary and 3 what the branch secretary said to the Executive Council, 4 because these are Executive Council meetings. And so 5 what we wanted from that meeting was for Stuart Sweetman 6 and David Miller to hear for themselves, not from 7 subpostmasters, from the representatives ourselves, 8 exactly what they were being told by subpostmasters. 9 Q. You said this issue was escalating. Where was this now 10 on your list of priorities as General Secretary? 11 A. Right up at the top. I spent more time on this -- and 12 I think you'll be able to see it from the evidence 13 you've got there -- of just how much time did have to 14 spend on this. In fact, I don't think I was a proper 15 dad and a proper husband at the time. I was really, 16 really focused on getting this system into post offices 17 to ease subpostmasters' minds and give them a bit of 18 money. 19 Q. You mentioned the meeting the next day on 11 June. If 20 we could turn that up which is NFSP00000539. This is 21 a special meeting of the National Executive Committee, 22 and if we could turn to page 7, please and we can scroll 23 down. We can see this is where Mr Sweetman and 24 Mr Miller joined the meeting because they only joined 25 for part of it; is that right? 32 1 A. Yes. 2 Q. If we look at after they join, we can see that they're 3 welcomed and then if we look at the paragraph beginning 4 "Mr Sweetman", it says: 5 "Mr Sweetman thanked the Chairman for the invitation 6 to [meet]. He introduced Mr Miller who had two roles. 7 He was the existing Role Programme Director of the 8 Horizon Programme, a position he had held since the 9 beginning of the previous year, and Managing Director of 10 the new Post Office Network Business Unit. In the 11 latter role he would be responsible for all things to do 12 with the Post Office Network and the interests of the 13 Federation and its members. Mr Sweetman's objective at 14 the meeting was to try to bring the Committee up to 15 date, from his point of view, on the path that they had 16 to tread and the route that POCL and the Federation must 17 travel together if they were going to be successful in 18 partnership." 19 If we scroll down again, it says: 20 "Automation would continue. All the central 21 payments and communications would go into the post 22 office but there would not be a Benefit Payment Card on 23 the system. Benefits would be paid by barcoded savings 24 books. The contract would run until 2005 by which time 25 benefits would only be paid by banking system or 33 1 emergency Green Giros. The contract with ICL would 2 change from PFI transactions, only going through the 3 system to one where The Post Office effectively 4 purchased the system from ICL Pathway." 5 A moment ago you said it was important for Mr Miller 6 and Mr Sweetman to come to this meeting and to answer 7 your questions. They seemed to think that they're 8 coming for a more general discussion about the project. 9 Would you accept that? 10 A. Yes, I would say, as well: they would, wouldn't they? 11 Q. If we can scroll over the page, we can see number of 12 questions that are put to Mr Sweetman. They're to do 13 with ACT, and if we scroll down further, resultant loss 14 of benefits, agency work. Then scrolling down: 15 "What plans do you have to: 16 "a) become a bank? 17 "b) combat the threat?" 18 Scrolling over the page: 19 "c) Secure other work/income for the Network? 20 "d) reduce your costs?" 21 Scrolling down again: 22 "How will this decision affect the agreement that 23 subpostmasters will not have to pay for the automation 24 of their offices?" 25 So there's quite a lot of discussion with 34 1 Mr Sweetman about things other than the difficulties 2 that are being suffered by subpostmasters; isn't there? 3 A. Yes. 4 Q. If we scroll over the page, so when we get to Mr Butlin, 5 it says: 6 "Mr Butlin referred to the serious problems that the 7 South West was having with the software, especially with 8 the balance, and asked Mr Miller whether any changes 9 were to be made in that respect. An assurance was 10 sought by the Committee that the balance would become 11 more user friendly, more logical and easier for 12 subpostmasters to use. Would it be possible for 13 subpostmasters to have more input into the way the 14 balance was done. The North East was facing similar 15 problems, subpostmasters were incurring additional staff 16 costs, an example being around £350 in the four weeks 17 that his office had been up and running." 18 So it was at this stage that the software issues are 19 raised, isn't it? 20 A. Yes. 21 Q. That's what Mr Butlin is referring to, is the 22 difficulties that subpostmasters are having? 23 A. Yes. 24 Q. Do you feel like this, as you said, very important issue 25 has got buried amongst a lot of the other issues that 35 1 were raised at this meeting? 2 A. Um, there was certainly a lot of issues raised in the 3 meeting. But I wouldn't have said that any particular 4 issue got buried. It was a -- you can imagine running 5 a union, particularly with the Post Office, there's lots 6 of issues to be gone through on the agenda. We had to 7 deal with all of them. And you'll notice that Mr Miller 8 actually made comment to that point later. 9 Q. Yes, if we scroll -- sorry, if we scroll down, I can 10 show you that. It says, this is what you were referring 11 to: 12 "Mr Miller acknowledged there was a problem and ... 13 there would be a software change to improve the 14 situation." 15 A. Yes. 16 Q. "If there were serious problems that could not be 17 overcome in the timescale the rollout would be delayed." 18 Would you accept those are two conflicting points, 19 though: that if there were problems the timescale for 20 the rollout would be delayed, and that's not something 21 you wanted either, was it? 22 A. No, but we did want it to be right. We didn't want to 23 have automation at any cost, and with warts and all. We 24 wanted it to be right, and so we not only would be 25 pressing the Government and the Post Office and anyone 36 1 else that "Let's have this automation in Counters, it's 2 vital", but also, we wanted it right. Of course we did. 3 Q. If we could turn over to page 14, please. I think at 4 this meeting there was a discussion about whether or not 5 the Federation should stay and work with POCL or break 6 away; is that right? 7 A. Yes, it was a-- it was a suggestion by one of the 8 Executive Council, yes. 9 Q. Why was that? Why was there a suggestion of breaking 10 away? 11 A. I think the feeling that we all had -- I had the feeling 12 as well -- that we were only told what they wanted us to 13 know, you know. They were involved in the negotiations 14 with ICL and Pathway. They knew what the Benefits 15 Agency and what the Treasury, and that, people were 16 saying. Very didn't. We were, if you like, artisans on 17 this one. We were foot soldiers, and doing our best to 18 get this automation in. But it needed it to be right. 19 And so there was a view that, well, let's cut and run. 20 Well, I mean, we had suggestions on the Executive 21 Council about buying a bank, buying National Savings, 22 all those things but you talk them through and people 23 realise that maybe it wasn't such a good idea after all. 24 Q. If we look at the bottom of that page 14, we see 25 a comment from a Miss Lindon? 37 1 A. Yes. 2 Q. "Miss Lindon referred to the controversy concerning the 3 plans for Horizon and questioned whether the Federation 4 was getting the package they needed. She suggested that 5 this, being negotiation time, was an opportunity for 6 POCL to talk to ICL ... about modifying and simplifying 7 the package before it was too late." 8 Would you agree with that? Was that a possibility 9 at that time, or did you see that as off the table? 10 A. No, I saw it as a possibility at the time, and that was 11 what we discussed with David Miller. And that wasn't -- 12 there wasn't a one meeting with David Miller; we had 13 regular, regular meetings with David Miller. And, 14 I have to say, he was very good and he did understand 15 whether -- whether David Miller could change anything, 16 I don't know, but he could certainly influence it from 17 the Post Office Board, which is where we needed it to be 18 influenced. 19 I eventually got to the Post Office Board, to the 20 Chairman, Allan Leighton, but my style is to gather in 21 people that would support us and let them do the 22 supporting, and David Miller was certainly a supporter. 23 Q. The note goes on to say: 24 "The Chairman advised that Mr Miller had requested 25 a list of all the problems with the software and he 38 1 would address them and talk to subpostmasters to see 2 what they wanted on the programme. He was embarrassed 3 that this had not happened already." 4 Did you get a list of those problems with the 5 software? 6 A. Well, yes. 7 Q. Did you understand what they meant? 8 A. Yes. 9 Q. It also goes on to say: 10 "It was important that members be advised 11 immediately of the outcome of this meeting and this 12 needed to be done in a way that would make them aware of 13 the seriousness of the situation, without resorting to 14 scaremongering." 15 Why was there a concern about scaremongering? 16 A. Well, because we mentioned before about the bad press 17 that this was getting, and I didn't want -- or we didn't 18 want that to be fuelled, you know. We wanted to -- we 19 didn't want to wash our dirty linen in public, put it 20 that way. We wanted this to be a success. We still 21 wanted this to be a success. And so what we didn't want 22 to do was to scaremonger so that people who wanted to 23 could write articles about it, nasty ones. 24 Q. Turning forward to 14 June a few days later, there's 25 a Select Committee hearing and if we could turn up 39 1 POL00028522, and if we could look at page 2, we can see 2 there the record of the Trade and Industry Select 3 Committee meeting. If we turn to page 6, we can see 4 this is the "Submission by the National Federation of 5 SubPostmasters". Were you involved in putting this 6 together? 7 A. Yes. 8 Q. If we turn to page 9, this is a section on "Programme 9 Delivery". If we look at the third paragraph, 10 underneath "Programme Delivery": 11 "On the system side, our understanding is that the 12 system had been moved successfully through the final 13 stages of testing prior to addition of the remaining 14 officers to make up the balance of 300 taking part in 15 the formal live trial. The training courses, go-live 16 arrangements and support arrangements both at offices 17 and via the helplines were ready to ensure a successful 18 trial prior to national rollout." 19 You don't mention in your submission that there are 20 subpostmasters who are suffering difficulties with using 21 the system, do you? 22 A. No. 23 Q. Why was that? 24 A. Well, I think, as I said before, this was -- this has 25 got a slow roll. It wasn't immediately big and serious. 40 1 This was -- most certainly we couldn't take our eyes off 2 it, but it was a slow roll. And there's always been 3 losses in sub post offices and, you know, they've been 4 addressed over time. But I could only repeat to 5 Government and to the Select Committee what's been fed 6 to me and that comes through the Branch Secretary, the 7 Executive Council, and then the meetings and the 8 subpostmaster -- and the subpostmasters would write to 9 me as well, and it was not an issue, in my view, at the 10 time to be raised to the Select Committee. 11 Q. Shortly after this, on 21, 22 and 23 June, there's 12 a National Executive Council meeting and, if we could 13 turn that up, it is at NFSP00000471. 14 A. Yes. 15 Q. If we could turn to page 22, please, and scroll down to 16 the bottom, we can see here that this is where counter 17 automation begins to be discussed again. If we turn 18 over on to page 23, and we look at the second paragraph, 19 we can see it says: 20 "The General Secretary described an excellent radio 21 interview broadcast on the Jimmy Young show, Radio 2, 22 with himself and the Labour spokesman Mr Martin O'Neill. 23 The Select Committee meeting he had attended with 24 Mr Peberdy had gone very well. They appeared to be 25 given longer to speak than anybody else and he felt they 41 1 had given a good account of themselves. The Select 2 Committee seemed very much in favour of sub post 3 offices." 4 Is that how you felt about that Select Committee 5 meeting? 6 A. Yes, it was. 7 Q. If we scroll down, it states: 8 "There was general discussion on the severe 9 difficulties being experienced by subpostmasters who are 10 already running an automated system. Seven sheets of 11 comments from the North East had been passed to Mr Dave 12 Miller. The difficulties and trauma being experienced 13 by some subpostmasters were giving rise to concerns for 14 their health and emotional wellbeing. It was felt by 15 some that a tragedy was not far away if something was 16 not altered soon. The software was considered to be 17 poor quality and not intended to run such a huge 18 network. The system is based on ECCO which was 19 originally written for a network of 700 -- not 15,500." 20 Do you remember these comments being made at this 21 meeting? 22 A. Yes. 23 Q. How did the subpostmasters feel or how did the 24 representations that you were hearing sound? Does this 25 accord with it? 42 1 A. Yes, it does. 2 Q. So people were discussing trauma. Yes? 3 A. Yes. 4 Q. Was that very concerning for you? 5 A. Of course it was, yes. 6 Q. Was that something you felt you needed to action 7 immediately? 8 A. Yes, and we did. And I was reassured that it couldn't 9 possibly be the Horizon programme, that was perfect. 10 And I went through a process of seeing different people 11 at different heights within the Post Office and that was 12 the standard answer I received. It was a very difficult 13 time, to be honest with you, and it just seemed as 14 though, with all the pressurising we were doing to 15 people, that was the answer we were giving. 16 Q. It goes on to say: 17 "Although there may be improvements to the general 18 system, most members present wanted to know if the 19 Committee had the power to say that the current system 20 is obviously not working and instruct ICL and the Post 21 Office to review or restart with more subpostmaster 22 friendly software." 23 Was that something that you considered? 24 A. Well, I didn't think in my wildest dreams we'd be able 25 to get the Post Office or anybody else, for that matter, 43 1 to -- we couldn't instruct them, ICL or anybody, to 2 change the system, but they were left in no doubt how we 3 felt about it, and that we weren't satisfied with the 4 sort of answers that we were getting. 5 But, even worse than that, we weren't satisfied with 6 the way that the security division were treating 7 subpostmasters, as though they didn't have any say in 8 the matter at all. That was awful. I mean, it's bad 9 enough for the system to be not good, but for the Post 10 Office to follow up -- the security division to follow 11 it up with browbeating and pressurising subpostmasters 12 was unforgivable. 13 Q. But why did you feel you couldn't go to ICL and the Post 14 Office and say, "Look, why don't you start afresh?" 15 A. Well, we didn't have any negotiating powers with ICL, of 16 course. We could only ask, and the Post Office we did 17 ask. We did ask, and we were told, you know, "It'll 18 work its way through". 19 Q. If we turn over to page 24, we can see some of the 20 further concerns that were raised by subpostmasters. 21 Sorry, if we could go back to the previous page, it 22 starts there: 23 "Mr Marshall reported that it took two hours for his 24 printer to come back up and since then, after printers 25 on different counters had gone down, it has taken at 44 1 least two hours for each to become operational again. 2 Rebooting the system takes at 12 minutes and, taking 3 into account all the time spent on the telephone with 4 the helpline, it takes many hours to balance on 5 Wednesday afternoon. There have been reports of 6 subpostmasters working until 10.00/10.30 pm which is not 7 only stressful, but eroding their free time." 8 Scrolling down: 9 "Mr Jannetta said that he and others of his 10 colleagues would have to rely on those subpostmasters in 11 the North East and South West who currently have this 12 system in place, to make sure their voices are heard 13 with their problems and to ensure that all the 14 difficulties encountered are satisfactorily overcome. 15 The point must be clearly made to the Business that this 16 automation is not going to do the job, that 17 subpostmasters have learned enough to know it will not 18 work satisfactorily and that it must not be rolled out 19 to an excess of fifteen thousand sub post offices until 20 all the problems have been overcome. 21 "The Richard Jackson automated system was considered 22 by both Mr Marshall and Mr Darvill to be an easier to 23 use, preferable, alternative to the present system. 24 Mr Darvill wanted to know if the lawyers had some hold 25 on the Horizon System for some reason, that it could not 45 1 be changed." 2 How did it make you feel, hearing stores like this? 3 A. I was very, very uncomfortable at the time throughout, 4 because I felt as though I was banging on doors to make 5 my points made, but I was sent away with some smooth 6 words, and -- but I felt helpless, really, in not being 7 able to go to ICL. I did have meetings with -- well, 8 I forget his name, a gentleman from Pathway, and made 9 him know exactly what was going on, but whether that was 10 fed back in -- because the relationship between the Post 11 Office and ICL was outwith me. I didn't have anything 12 to do with that, and sad to say, I wish I had have done. 13 Q. If we could scroll down again a little bit, and a bit 14 more. It says: 15 "Mr Edmondson felt that, in general, most of 16 subpostmasters' difficulties and complaints about the 17 system were being largely ignored." 18 Do you feel like your concerns were being largely 19 ignored? 20 A. I felt as though I was being listened to and, after I'd 21 gone out of the room, I'd gone out of the room. That's 22 what I felt. But I still had to keep on championing the 23 cause. I couldn't stop. I was on this treadmill and 24 I had to get it done and I had to get it delivered but 25 I had to tell them about all the problems, as well. So 46 1 I don't think the Post Office looked endearingly at me 2 at the time, but I had to do what I had to do. 3 Q. If we could look at page 25. It refers to, if we look 4 down the page, "Mr Peberdy thanked the Council for their 5 information", and that reflects the concerns that were 6 voiced by the various representatives. It says: 7 "They were exactly the problems expressed to Dave 8 Miller at their meeting on 11 June." 9 We've already been to the minutes of that meeting. 10 Do you feel like they were fully raised at the meeting 11 on 11 June? 12 A. Yes, yes, I do. I felt as though we'd done our job with 13 David Miller and Stuart Sweetman. That was the meeting 14 you were referring to, wasn't it? 15 Q. Yes. 16 A. Yes, I did. 17 Q. Turning over the page to page 26, and if we scroll down, 18 it says: 19 "The General Secretary was asked by Miss Lindon to 20 confirm the rollout would not take place until the 21 problems had been resolved. She said her region was 22 being told August. Mr Baker was emphatic that this 23 would not be permitted to happen and the resolution of 24 problems prior to rollout could be ensured. The 25 Federation had equal standing with the other 47 1 participants in the Working Group and our views would 2 therefore receive equal consideration." 3 Is that right, that you had the power to refuse 4 rollout or you felt you had the power to refuse rollout 5 if the problems weren't resolved? 6 A. No, I don't think it was right. I'm reading it, and, 7 well, they are minutes taken at the time, so I can't 8 argue with that. But I might have been emphatic that we 9 would let everybody know, but I -- we, the Federation, 10 didn't have the power to stop the rollout. We did have 11 the power to tell people in the position of power what 12 the situation was, and we did. But we were a very small 13 cog in a very big wheel, and I did my best. 14 We did our best to bring this to the attention of 15 the Post Office, but we didn't deal directly with ICL or 16 anyone else, really. So all we could do was refer back 17 to the Post Office, Dave Miller and all those that were 18 delivering this project to Post Office, because you'll 19 know there was loads and loads of people delivering the 20 project, and some people making sure the counters were 21 okay, others making sure the screens were -- loads of 22 people. 23 And we told them all what was going on, but it was 24 frustrating to think, at that time, that we wanted to 25 bring it home, but we also wanted correcting things that 48 1 were going wrong. 2 Q. So coming back to this minute, I think you say: if the 3 minute says that, then you probably did say it. But 4 would you accept that, in saying that you wouldn't 5 permit rollout to happen, you were overstating to your 6 members the power that your group had? 7 A. Yes, I would. If that's what I'd said, I would 8 definitely say that we were overstating our powers. 9 Q. If we could turn to page 27 -- sorry, actually at the 10 bottom of page 26, it says: 11 "Discussion at length took place between members as 12 to whether a public campaign should be started. Many 13 felt that at action should begin at once [I think 14 'action should begin at once'], while others felt that 15 we may lose the goodwill of Government and the Post 16 Office if an offensive was launched immediately. 17 A militant attitude may also jeopardise the Federation's 18 acceptance as an equal member of the Working Party. In 19 general it was felt that no plans could be made until 20 after the issue of the Government's White Paper in early 21 July and the contract was signed on the 19th ..." 22 Can you explain what happened at the meeting and why 23 and how it was decided that a public campaign shouldn't 24 be launched? 25 A. I can't, actually. I can tell you the experiences at 49 1 the time, but I can't remember that particular 2 discussion. We had two campaigns. We marched on 3 Parliament on both. The latter one we had -- I can't 4 remember the dates precisely, we delivered a petition 5 for 4 million signatures to Tony Blair, and these were 6 signatures, not e-signatures: signatures. And that was 7 important -- it was important we did that and that was 8 the second one of the two, because the only power we'd 9 got, really, was the number of customers that were 10 coming through our doors. 11 That was our strength, and so we showed our 12 strength. That's the way we showed it. We don't go on 13 strike. There isn't even a no-strike agreement. It's 14 just that subpostmasters are shopkeepers as well as 15 subpostmasters, we couldn't -- they wouldn't close their 16 doors anyway, and why should they? 17 So that was how we exercised our power and, out of 18 that, come the PIU report; out of that, the Select 19 Committee report. We were pretty influential for being 20 a small cog in a big wheel, we were. But -- so militant 21 attitude? Is a march on Parliament of thousands of 22 subpostmasters? It probably is bordering on militance, 23 only like subpostmasters can be militant, of course. So 24 no, we do it when we need to. 25 Q. Were you telling people at this time they shouldn't 50 1 criticise the Horizon System publicly? 2 A. I certainly said that. I don't know whether it's this 3 time or not, but I've certainly said "Be careful what 4 you say about Horizon outside, because we don't want to 5 kill it. We want it to happen but we want it to happen 6 right". So while we, within the Federation, are arguing 7 with the Post Office, arguing with anybody else that 8 will listen to us about the faults that are wrong with 9 it and the difficulty we were having. We still wanted 10 it to happen. 11 Let me say, I held no torch for Pathway or ICL. We 12 didn't have any say in who got this contract at all. We 13 were not allowed to go anywhere near it. But, having 14 got it, it's the best we'd got. We didn't have anything 15 else so we needed to make it a success. So it's always 16 a balance. Life's a balance and that was a balance. 17 Q. Turning to page 27 and scrolling further down, please, 18 to the National President. It says: 19 "The National President asked the meeting if 20 everyone was happy that the agreed way forward would be 21 decided on 11th July and that a public campaign would 22 not, for the moment be pursued." 23 So the upshot of this meeting was "Let's wait and 24 see"; is that right? 25 A. It would appear that way, yes. I couldn't honestly say, 51 1 but it would appear that way. 2 MS KENNEDY: Chair, I'm looking at the time. This might be 3 a convenient moment for a short break. 4 SIR WYN WILLIAMS: Yes. Can I just ask Mr Baker one or two 5 things before we do that, if we're leaving that 6 document. 7 On a number of occasions, in answer to counsel's 8 questions, you've said that you raised it with the Post 9 Office, all right? Now I want you to be, if you can, 10 a bit more precise about the personnel that we're 11 talking about, all right? 12 A. Right. 13 SIR WYN WILLIAMS: So I understand or I think I understand 14 that some of the occasions you may have raised this 15 would have been with Mr Miller? 16 A. Correct. 17 SIR WYN WILLIAMS: Was that a direct you-to-Mr Miller sort 18 of thing in a discussion between the two of you? 19 A. Yes, well, I would probably have my colleague John 20 Peberdy with me. I think you've got him to come later 21 on. 22 SIR WYN WILLIAMS: A small group of people where you were 23 discussing these things frankly; is that what I'm to 24 understand? 25 A. Correct, yes. But it didn't stay at Dave Miller. There 52 1 was David Mills, who was the Chief Executive at some 2 point, Allan Leighton, who was the Chairman of the Post 3 Office, Stuart Sweetman. It would be anyone. Anyone 4 that we could talk to, we would. If you can hear 5 desperation in my voice now, I'm only echoing what it 6 was like at the time. 7 SIR WYN WILLIAMS: All right. So do I get the impression 8 that you would raise these issues with as many senior 9 Post Office people as you could? 10 A. Yes, anyone that would listen. 11 SIR WYN WILLIAMS: Right. Was this done in an arranged 12 meeting or would you pick up the phone, or what are we 13 talking about here? 14 A. Well, anything, any of those. An arranged meeting, 15 picking up the phone, tried to take him to dinner one 16 night and coax him into having a glass of wine and 17 listening to me. Anything that I could to bring it home 18 to the Post Office. And, in fact, there were many, many 19 days in my working life -- I'd work Monday to Friday in 20 my office in Shoreham, I'd then jump on a train and go 21 to London to see people there, and then on a Saturday, 22 I would get in my car and drive up to Cumbria, say, and 23 do a dinner-dance there and speak to subpostmasters. 24 That was my life. I was doing nothing else. 25 SIR WYN WILLIAMS: All right. I think I've got the full 53 1 flavour now. 2 So yes, let's have our break. What time shall we 3 recommence? 4 MS KENNEDY: 11.30? 5 SIR WYN WILLIAMS: That's fine. Thank you very much. 6 MS KENNEDY: Thank you, Chair. 7 (11.12 am) 8 (A short break) 9 (11.30 am) 10 MS KENNEDY: Hello, Chair. 11 SIR WYN WILLIAMS: Hello, there. 12 MS KENNEDY: Restarting with the evidence of Mr Baker. If 13 we could call up NFSP00 -- yes, that's the one. We were 14 looking at this document when we left off but if we 15 could scroll down to the bottom, you left this general 16 Executive Council meeting to go to a working party 17 meeting; is that right? 18 A. Yes. 19 Q. We see your report at page 27 onwards, and if we turn 20 over to page 28, and scroll down, we can see there that 21 your report says: 22 "The subject of systems faults was raised and the 23 NFSP were given assurances that there would be software 24 improvements to cure the present difficulties. The 25 Federation were asked for more precise numbers of 54 1 subpostmasters who were experiencing difficulties as 2 this information would assist them to provide us with 3 the help we require." 4 Is that what happened at the meeting? 5 A. Um, that's what happened, yeah, that's the report of the 6 meeting we had with them. We also had a meeting with 7 the Post Office about it and we did give them the 8 information yes. 9 Q. We also have the working party minutes of that meeting, 10 if we can turn up NFSP00000203, and on to the next page. 11 If we look at paragraph 5, we can see there that you 12 say: 13 "Mr Baker said it was extremely important for the 14 rollout to be absolutely right; with so many planned per 15 week ... there would be risk of collapse otherwise." 16 It doesn't record there that you raised issues with 17 software problems. Was that something that was missed 18 off the meeting minute? 19 A. Um, I was making a general point there, as far as I can 20 recall. Well, most certainly it was important, the 21 rollout, you're absolutely right, and that sentence 22 embraces all aspects of the rollout. 23 Q. But you'd just left a meeting where you were hearing 24 really distressing things about what subpostmasters were 25 going through. 55 1 A. Yes. 2 Q. Did you not think at this meeting you should, front and 3 centre, be saying, "This is terrible, let me tell you 4 about what subpostmasters are going through"? 5 A. I can't recall whether I said that or not, to be 6 perfectly honest with you. I mean, that's a minute that 7 obviously somebody has taken, and I don't know whether 8 that was paraphrasing what I said, or shortening it, or 9 whatever. I don't know. I can't remember. But, yes, 10 it was written beginning in my ears. It had been for 11 some time. 12 Q. Do you feel you got your point across to the Working 13 Group that this was such a serious issue? 14 A. It's a cautious yes, because getting your point across 15 is one thing, whether anybody takes any notice of it 16 once you've got it across, is entirely something else. 17 And I was and remain very concerned that, whilst I was 18 talking to the Working Group and management of the Post 19 Office, Post Office Counters Limited, David Miller, 20 et cetera, the people in the Post Office Investigation 21 Department -- whether there was a disconnect between the 22 two, I don't know. 23 But the treatment that they were metering out to 24 subpostmasters were not in any way in the spirit of the 25 discussions I was having with them. 56 1 Q. You mentioned correspondence with David Miller. On 2 24 June you sent a letter on to the executive officers, 3 that you received from David Miller. If we can call 4 that up, it's NFSP00000073, and if we could first look 5 at the letter which is on page 2., and scroll down. 6 This is a letter in response to something that Jean 7 Kendall presented with a list of issues that 8 subpostmasters, as the NFSP saw it, were having. 9 If we could scroll over on to the third page and 10 scroll down, we can see that David Miller, under 11 "Training", is saying: 12 "This is probably our greatest area of concern and 13 is being pursued vigorously with ICL. The areas you 14 have identified such as balancing and cash account are 15 part of the redesign which is currently taking place and 16 is based on subpostmasters' real experience." 17 That would suggest that David Miller saw some of the 18 balancing issues as concerned with training. Is that 19 how you read that? 20 A. Yes. 21 Q. If we turn over to page 4, we can see balancing has been 22 raised as a separate issue, and it says: 23 "Your concerns about printing, redeclaration of 24 stocks, and identification of first and second class 25 stamps and postal orders are already in the process of 57 1 resolution and a software drop in July will deal with 2 them. However, there are issues around the balancing 3 process which are part of the training response and have 4 yet to be satisfactorily addressed by Pathway. Clearly, 5 this is something on which we will base our decisions 6 about acceptance and rollout." 7 So there you're being told there are issues with the 8 software, which will be dealt with by a software 9 release, or there are issues with training, which will 10 be dealt with by training. 11 If we turn back to page 1, and scroll down, we can 12 see that, in sending this letter on, you say: 13 "Please see attached a letter from David Miller 14 which goes some way to explain the problems and 15 corrective action which has been taken." 16 Did you feel that corrective action was being taken 17 at that action? 18 A. Not at that time, no, but I believed that corrective 19 action would be taken once it's been reported to David 20 Miller, and his actions should prove so. And, I mean, 21 this actually underlines the point about your earlier 22 question, as to about who did we raise it to and whether 23 they did take any notice of it. Well, I think that 24 statement from David Miller demonstrates that yes, we 25 did, and yes, he did listen. 58 1 Q. Yes. You say it goes some way to explain the problems. 2 What did you feel was outstanding? What other things 3 did you want answers on? 4 A. I was desperate to get answers about the treatment that 5 subpostmasters were receiving from the Post Office 6 Investigation Department, when errors had been 7 discovered or reported. They were treated as criminals, 8 and it was offensive to me and I wished that I could do 9 something about it. But whenever I pushed on that door, 10 I was told that the system can't make errors. You know, 11 "What you put in, you get out", sort of thing, and 12 I resented that. That's what I meant by that. 13 Q. But to be clear, were you raising issues about the 14 system itself or the action that was taken by Post 15 Office against subpostmasters? 16 A. I was referring to the latter of those at the time. 17 Although the system and the hardware and software, and 18 so on, yes, we were deeply concerned about that, as 19 well, we wanted it to be a success, but not at any cost, 20 and one of the costs was the treatment that the 21 people -- I'd never call people my members but, in fact, 22 that's how I felt. 23 Q. Did you believe the Post Office at this time when it was 24 saying to you it was infallible and Horizon was always 25 right? 59 1 A. At that point, I really had no choice but to believe 2 them, because they were the masters of it all. I mean, 3 I wasn't. And I did believe, actually, in the Post 4 Office, up to some point -- and I can't remember 5 precisely what point we're at, at this stage, but you 6 do -- you do, you tend to want to believe them because 7 that's what you want to hear. You wanted to hear that 8 the system is robust. But, in fact, what subpostmasters 9 were saying to me was "No, it's not". 10 Q. Turning forward to 7 July 1999, it's NFSP00000200, and 11 if we could up page 2. This is a further meeting of the 12 Horizon System Working Group. And, again, if we look at 13 the contributions you and the NFSP make, if we look at 14 paragraph 4, there's mention of acceptance testing: 15 "... Mr Miller said that [this] was going ahead with 16 ICL to a pre-agreed programme. Mr Peberdy asked what 17 defined a 'high' category incident. Mr Miller said this 18 would be one which threatened the progress with the 19 project within the agreed timescale. He did not think 20 there would be major problems. Mr Hodgson emphasised 21 the need for regular progress reports." 22 At this meeting, you are not making a point of 23 raising the balancing issues that subpostmasters are 24 facing, are you? 25 A. No, I'm not, no. Can I just interject here at this 60 1 point? 2 Q. Please. 3 A. It didn't start with the Big Bang, as I explained 4 before. It was a slow, a gradual increase in the 5 numbers of subpostmasters. And I only get to hear what 6 is fed to me. Now, there's three classes of 7 subpostmasters, can I put it that way? There are those 8 that are members of the Federation and would refer it to 9 the branch secretary and who we hope would refer it 10 to -- there are non-members, who wouldn't, obviously, 11 because they're not members. And a third category is 12 those that felt embarrassed that they had losses in 13 their Post Office and weren't saying anything. 14 And so we had to amass pass this information the 15 best way we could, and it should be fed back to the 16 Federation headquarters, via the branch secretaries and 17 the Executive Council. If that didn't happen, we 18 wouldn't get to know about it. And so, at this point, 19 1999, it wasn't the real problem that it is now. And so 20 we were making decisions on what we knew at the time. 21 Q. If I could refer you to paragraph 9 of that document, 22 which is on the next page. It says: 23 "Moving on to a report on the government's intention 24 to establish an interdepartmental working group on POCL 25 funding issues, Mr McCartney said the current 61 1 speculation in the press on the future of the network 2 was not a helpful background. Mr Baker said that he 3 thought the group should have a role in disseminating 4 good news stories to counter the scaremongering." 5 What did you mean by "scaremongering" in this 6 context? 7 A. The people that were saying that it was doomed. I think 8 something like Computer -- I hate to say it, Computer 9 Weekly maybe, or something like that, you know, were 10 saying the system is buggered. 11 Q. But at this stage you've got subpostmasters telling you 12 they're suffering with all these difficulties and you're 13 proposing to go forward and speak to the press about how 14 positively it's a good thing. 15 A. Yes. 16 Q. Is there a tension there? 17 A. Yes, I've explained the dilemma that we have. We wanted 18 to be a success, we wanted this to happen because, 19 without it, we'd be dead in the water, but we also 20 wanted to be right. Now, as far as the public were 21 concerned, they didn't know or we didn't want them to 22 know that it was perilous and threatened. We wanted 23 them to think it was fine. But we, in our negotiations, 24 wanted to tell the Post Office that we were very worried 25 about it. So there was a tension there between the two, 62 1 yes, of course, but that's -- you know, that was my job 2 at the time. 3 Q. Moving on to 10 August 1999, there was a special Horizon 4 meeting in Newcastle. If we turn up NFSP00000237. You 5 went with David Miller of POCL to this meeting, and it 6 records, in the second paragraph, that: 7 "[Mr Miller] gave a short address, followed by Colin 8 Baker, General Secretary, NFSP. Mr Miller told the 9 meeting that Horizon was formally accepted 2 weeks 10 ago -- ... trigger points were important." 11 I think if we scroll down further, it says: 12 "The meeting was then opened for subpostmasters to 13 comment on the Horizon Programme and for questions to be 14 asked of POCL and requests made for future actions." 15 So, at this stage at this meeting, subpostmasters 16 are being encouraged to share their experiences of the 17 Horizon programme, aren't they? 18 A. Yes. 19 Q. If we scroll down again, it says, "General point": 20 "Agreed by all on the trial of: 21 "the stress on the workforce 22 "the strain on people's lives and marriages 23 "lost holidays by some subpostmasters 24 "the miserly amounts paid by POCL to subpostmasters 25 on trial. (Colin Baker explained that the amounts paid 63 1 were not negotiated by the Federation but on the 2 Federation's representatives the amounts had been 3 doubled from the cash to be paid. Subpostmasters told 4 of costs up to £780 in extra wages. 5 "Of the 44 Horizon offices present in a vote 6 30 offices said that they suffered stress and only 7 4 thought payment was sufficient, and they had been in 8 first phrase." 9 Was this a difficult meeting for you? 10 A. No, not really. It was, again, part of my technique to 11 put management in front of subpostmasters and let them 12 hear for themselves. So it wasn't a difficult meeting 13 for me. It might have been difficult for David Miller, 14 but they were doing -- subpostmasters were doing what 15 I wanted them to do. 16 Q. If we turn over the page, it says: 17 "All offices agreed that a checking system without 18 information having to be removed is essential to the 19 successful use of the system." 20 What was that about? 21 A. I really couldn't tell you. I really don't know. Sorry 22 about that. 23 Q. Was it mentioned that it would be helpful to have a way 24 that subpostmasters could check the Horizon data to see 25 if it was correct? 64 1 A. It might well refer to that but, for the life of me, 2 I can't remember what that point is. 3 Q. If we turn to page 4, under "Balancing": 4 "Every office complained of System Failure, every 5 balance day need to reboot. POCL have system to know 6 how many reboot without offices informing POCL -- but no 7 action taken by POCL to improve situation. Waiting time 8 at Helpline for rebooting instructions make SPMs act on 9 their own." 10 This sounds like such quite a dire situation; did it 11 feel that way? 12 A. Yes, for offices involved in that part of the trial, 13 yes, it was. It was dire, and it was all referred to 14 the Post Office. 15 Q. Did you see that as your role: to allow subpostmasters 16 to say what they wanted to the Post Office (The witness 17 nodded) and then that was the end of your role in 18 respect of these issues? 19 A. No, it wasn't the end-off my role. My role was ongoing 20 for many years. But, most certainly, it was part of my 21 technique to put subpostmasters in front of managers 22 with us there and let them vent their feelings and let 23 them tell them precisely. Because although I can tell 24 them, it's nothing like hearing from subpostmasters 25 themselves. 65 1 Q. If we look at the very bottom of that page it says: 2 "All offices agreed there was nothing fundamentally 3 wrong with the system, however they did not want rollout 4 until further improvements had been made." 5 Was that something you decided you would keep an eye 6 on, to see whether those improvements were made? 7 A. Yes. 8 Q. Moving forward in time to 11 October 1999, if we can 9 turn up NFSP00000066, and if we could turn to page 4 and 10 look at paragraph 5. So this is the start of the 11 meeting notes but if we look at page 5, paragraph 5., we 12 can see: 13 "Mr Miller explained that formal acceptance of the 14 reconfigured Horizon system planned for 18 August had 15 been postponed because of POCL's concern about training, 16 system stability, data integrity (there had been 17 an unacceptably high level of screen freezes) and 18 effective operation of the helpdesk. The Post Office 19 had accepted the system on 24 September on the basis 20 that effective remedial action had either been completed 21 or was in hand." 22 So, at this stage, Mr Miller is flagging up that 23 there are issues with data integrity in the system; is 24 that right? 25 A. Yes. 66 1 Q. Did that ring alarm bells with you? 2 A. Um, no more than were already there, to be honest with 3 you. We obviously knew there were problems with it and 4 we wanted him to address it. 5 Q. But you've previously said that you knew that 6 postmasters would be responsible for the losses? 7 A. Yes. 8 Q. If there's an issue with data integrity, it logically 9 follows that they could be responsible for losses that 10 didn't exist, doesn't it? 11 A. Correct. 12 Q. So was this now highest on your list of priorities? 13 A. I don't know. I don't know what was highest on my 14 priorities at all. I was very concerned about what 15 investigations were going on or lack of it, but I can't 16 really say whether it was the highest or not. 17 Q. If we look further down to paragraph 7, scrolling down, 18 it says: 19 "Mr Deegan asked about the issues of spare capacity 20 and triggers for payment. Mr Miller confirmed that the 21 Post Office were clear that they would be able to use 22 spare capacity on the system (this had previously been 23 an issue of dispute with ICL). The Post Office will pay 24 ICL £60 [million] on 24 October on initial acceptance of 25 the system and will pay ICL a further £80 [million] when 67 1 they achieve rollout to 1,600 offices, which is planned 2 for around Christmas time. ICL would not receive 3 payment until the target had been reached, though the 4 Post Office was not expecting significant slippage. 5 Mr Baker expressed support for the Post Office's 6 position -- whilst the there was a need for ICL to hit 7 deadlines it was also important for the system to be 8 delivered in full working order. The feedback which 9 Mr Baker had received from NFSP members was 10 intermittent, and not all positive but problems now 11 seemed to be being sorted out and training seemed to 12 have improved." 13 Is that an adequate reflection of the feedback that 14 you were receiving from NFSP members at that time? 15 A. Yes, at that time, I'm pretty sure it was. 16 Q. But it was not all positive. What I've just shown 17 you -- 18 A. No, it's definitely not all positive. 19 Q. Would you agree it was generally quite negative? 20 A. I would agree that it was not all positive. I'm quite 21 sure where we would draw the line there. 22 Q. You had an opportunity here to cut through and say to 23 the working group "Subpostmasters are finding this 24 really difficult, we don't think it's fit for purpose, 25 we're talking about whether we could go with something 68 1 completely different". But you decided not to do that 2 here. Why? 3 A. This was the Horizon Working Group, chaired by 4 government. Those sort of discussions were left for 5 management of the Post Office, and those that were 6 responsible to delivering the programme. This is -- you 7 know, we're talking -- we'd go from one -- say, "950 8 post offices automated", to "Mr Baker expressed support 9 for that position". Fine. And then it says "It has 10 been received from members that it was not all 11 positive". Well, you know, that was -- that high-level 12 discussion, that was a high-level statement. 13 Q. With the benefit of hindsight, do you wish that you'd 14 raised this as an issue at that time? 15 A. With what I know now, yes. 16 Q. Moving forward to 15 November, there's another note of 17 the Horizon Working Group at NFSP00000063 and, again, 18 given your previous answers -- sorry, if we turn to 19 page 5, that's the start. You don't raise the issues 20 that subpostmasters were having with the system. Was 21 that, again, because you felt it was inappropriate to do 22 so in this forum? 23 A. The bit I'm looking at talks about the Child Benefit 24 form. Am I missing a little bit? 25 Q. Yes, sorry, scrolling down. You can see there there's 69 1 discussion of the Child Benefit form. 2 A. Yes. 3 Q. If we go through, let me know if you'd like a moment to 4 read through it fully. 5 A. Which bit? 6 Q. Well, I'm putting to you, in a way, the note in its 7 entirety. We can have a break for you to read it, but 8 you didn't feel it appropriate to raise the issues that 9 the subpostmasters were having with the system in this 10 Working Group? 11 A. Not in this Working Group, no. I did raise concerns in 12 this Working Group, and you'll see at paragraph 5 what 13 I said there. But not this Working Group, no. 14 Q. At the beginning of January 2000, the Post Office 15 started looking at reforming the policy on losses. If 16 we could turn up NFSP00000361, and if we can blow that 17 up and scroll down, please. In the second paragraph, it 18 says: 19 "As discussed over the phone the policy should have 20 been amended to cover how we deal with subsequent losses 21 as the current policy could be deemed punitive." 22 Do you remember what that current policy was? 23 A. Can I just see who has authored this letter? 24 Q. If you scroll down, it's Steve Gibbs? 25 A. Oh, Steve Gibbs, yes, okay. Thank you. The policy was, 70 1 as I set out earlier, contractual. A subpostmaster is 2 responsible for all losses incurred, including those of 3 his assistants. Now, we've identified at this stage 4 that there's glitches in the system, and I think what 5 this is saying, if I recall it, is that we needed some 6 leniency in this. 7 We're not trying to come away from the contractual 8 side of it at all, which is there and, you know, is 9 agreed. But because subpostmasters were now sending 10 their cash accounts off through Horizon and there was 11 some funny stuff happening to it when it got there, we 12 needed another look at this, really. And we needed to 13 engage with Steve Gibbs, and whoever, for a little bit 14 of leniency in it. 15 But even then, at this stage, we weren't aware of 16 what's coming down the track regarding subpostmasters' 17 losses and how many there were. 18 Q. If we could turn forward to the 1 February 2000 when you 19 received a letter from Don Grey, that's NFSP00000348. 20 I think it starts by saying: 21 "I was sorry to learn from our recent telephone 22 conversation you had received no affirmation of Horizon 23 national rollout from the 24 January." 24 Was that right? Were you not informed of that? 25 A. Yes, as far as I can recall. 71 1 Q. If we look at the second -- sorry, third paragraph, 2 scrolling down, it talks about the system since rollout, 3 and it says: 4 "Hopefully these improvements will have an evident 5 beneficial effect and tackle the problems identified in 6 the pre-Christmas research that was done via 7 335 telephone interviews with staff and agents who were 8 involved in Horizon rollout last Autumn. There is some 9 positive feedback from this research ([for example] 36% 10 improvement in ease of balancing; 90% found the system 11 was easy to use; fewer dissatisfied with training than 12 in live trial and 80% satisfaction with the automation 13 programme in general)." 14 Did you consider that this was an improvement and 15 that improvements were being made throughout this time? 16 A. Yes, I did. 17 Q. Do you understand what was meant by a 36 per cent 18 improvement in ease of balancing? 19 A. Yeah, I do. 20 Q. What were they, or what was it? 21 A. It was 36 per cent of offices had experienced 22 an improvement in ease of balancing. Now, for the life 23 of me, I can't -- I don't know what they thought was 24 easier, but I can only take it on face value that 25 36 per cent had an easier balance. I can't know what 72 1 goes on in every Post Office in the land all the time. 2 Q. Turning forward to 10 February 2000. If we can pull up 3 NFSP00000261. Scrolling down, this is a letter that you 4 wrote to Executive Officers saying: 5 "Having been putting pressure on the Automation 6 Director for some information regarding Horizon Rollout, 7 I am sure you will be keen to see a letter which we 8 received which sets out the position following the 9 review held by Post Office Network Unit. 10 "Hopefully a regular dialogue will soon be 11 established at territorial level in order to assist 12 members to overcome the difficulties that they may well 13 experience as their offices are automated." 14 If we turn over the page to page 2 -- sorry page 3., 15 and scroll down. This is a letter that was written to 16 you from David Smith, and if we look at the third or 17 fourth paragraph, it says: 18 "The feedback points in the direction of training, 19 balancing and helpdesks as the major improvement areas 20 with balancing very much the common theme. However, in 21 each of these areas outlets are more or less evenly 22 split between those who think we've got it right as 23 opposed to wrong. The trick to be pulled off is to 24 improve matters for those who believe we need to improve 25 without 'turning off' those who think we've got it 73 1 right." 2 So in terms of balancing being the common theme, in 3 terms of feedback points, was this what you would have 4 expected the feedback to be at this stage of the 5 rollout? 6 A. Yes, I only get bad news from subpostmasters, by the 7 way. They don't write in and say how lovely things are. 8 So I would not be surprised at that at all. 9 Q. Were you concerned that the Post Office seemed to 10 repeatedly attribute issues to training, rather than the 11 Horizon program itself? 12 A. Yes, because they were consistently saying, at this 13 stage, that there was nothing with Horizon, it was 14 perfect, you only get out what you put in. So that was 15 why they were focused on training and things. And I do 16 believe that the people that I was dealing with at the 17 time believed that. But I'm not sure now, with the 18 benefit of hindsight, that there were those who knew 19 something was not entirely correct. 20 Q. Moving forward to 4 May 2000, if we could turn up 21 NFSP00000020 and scroll down. This is a letter that you 22 wrote, a circular to the National Executive Council, and 23 in it you say: 24 "You may no doubt be aware that there were 25 significant difficulties with Horizon balancing at some 74 1 Post Offices yesterday. We are waiting for a definitive 2 answer from POCL on the problems encountered. However, 3 what we know so far is that a problem arose last 4 Thursday morning in the uprating of stamps and resulting 5 from poor advice some subpostmasters did not correctly 6 complete the upgrading of stock relation that day. That 7 manifested when they tried to balance yesterday. 8 "As a result of the difficulties, the system tried 9 to produce a negative balance but Horizon will not allow 10 a negative balance and, therefore, subpostmasters' 11 balances could not be completed." 12 Do you remember this specific incident? 13 A. I do, yes. I remember being at the office late trying 14 to resolve the situation from my position afar, really. 15 Q. Do you think that it could have been an issue with the 16 Horizon System itself? 17 A. Oh, yes, yes, definitely did. 18 Q. If we turn over to page -- 19 A. Sorry, I think though there was some telephone problems 20 there. I think it was a telephone line that might not 21 have been working. Don't hold me to that. 22 Q. If we can turn over to the second page, it says: 23 "The difficulties with Horizon yesterday, we were 24 advised, was primarily not a systems fault. It was 25 primarily difficulties encountered by subpostmasters 75 1 last Thursday in understanding the instructions for 2 uprating their postage stock which led to balancing 3 difficulties yesterday." 4 When you say "we were advised", where has that come 5 from? 6 A. The only people it could have come from was Post Office 7 Counters Limited but at what level that would be, 8 I don't know. 9 Q. So, even at this stage, the Post Office were saying to 10 you it's to do with user error rather than an issue with 11 the system? 12 A. Oh yes. Oh yeah. They were adamant that Horizon was 13 perfect, and they were user errors. 14 Q. When you say "they", who was it who was saying this to 15 you? 16 A. Well, right up to David Miller, I think. 17 Q. The last paragraph says: 18 "They have accepted that there is a clear learning 19 point to make sure instructions are more understandable 20 and they have also accepted a need to review and 21 communicate the difficulties of what they have learned 22 both to those within the Business and to subpostmasters. 23 They are however trying to deal with the problems today 24 and clearly this is the most critical aim for them to 25 focus upon." 76 1 So did you feel that you were forced to accept what 2 the Post Office was saying, that there was no systems 3 error and you had to proceed from there? 4 A. Yes, yes. 5 Q. At this period of time, you've known that there are 6 issues with subpostmasters struggling to balance for 7 over a year. Do you think you could have done more at 8 this stage, when this type of issue arose, to stand up 9 for subpostmasters? 10 A. The -- for more than a year comment? Can you just 11 repeat that? I'm not quite -- 12 Q. So I've taken you through a number of minutes that show 13 that subpostmasters back to 199 -- 14 A. Oh, I see what you mean, yes. 15 Q. So to ask my question again, did you feel, at this time, 16 it was time to escalate this or to do more to try to say 17 to the Post Office, "Look, these issues have been going 18 on for over a year, we need to do something about the 19 system?" 20 A. Yes. Yes, I did. 21 Q. If we could move to 5 October, you received a circular 22 from POL. If we could turn up NFSP00000406. 23 A. Can I see who has signed it, please? 24 Q. Yes, I was going to ask. If we turn over the page. 25 A. Okay. 77 1 Q. I was going to ask you if you remember this or who sent 2 it to you. Because it's not signed. 3 A. I don't, actually. I don't actually remember it. No, 4 I don't, I'm sorry to say. 5 Q. Please don't apologise. We can see that it's from the 6 Post Office, if we scroll back to the first page. 7 A. Yes, indeed. 8 Q. What I wanted to ask you about, so this is generally 9 headed that it's about "National Rollout Progress"? 10 A. Mm-hm. 11 Q. But if we turn on to the second page, and we scroll 12 down, the "Cash Account" section, which is second from 13 the bottom, "Cash Accounts": 14 "Since the introduction of Horizon there has been 15 a significant reduction in amounts held in unclaimed 16 payments/uncharged receipts. The same cannot be said of 17 authorised shortages, and internal processes, including 18 additional help to specific outlets, had been improved. 19 The level of errors on Horizon continues to fall but has 20 still not returned to pre-Horizon levels and analysis of 21 root causes has led to a number of remedial actions 22 being taken." 23 So in October 2000, the Post Office is saying that 24 there are higher levels of errors on Horizon than there 25 were before. Again, did this concern you? 78 1 A. It didn't surprise me. Yes, I was concerned about the 2 whole thing at this stage, but it didn't surprise me 3 because, as we've discovered before, there was -- some 4 subpostmasters weren't showing all the errors. Some 5 were. And with Horizon, of course, they had to show the 6 errors. And so I would not have been surprised to have 7 seen that, although I don't remember seeing it, of 8 course. 9 Q. Turning on to November 2000, if we could turn up 10 NFSP00000153. This is a circular to the National 11 Executive Council about ghost entries on giro daily 12 reports. Do you remember this incident? 13 A. Yes. 14 Q. If we turn over the page to page 2, and if we look at 15 that main text in the middle of the box, it says: 16 "There have been occasions where Girobank transfers 17 entered onto CSR+ Horizon terminals may not be visible 18 on the office copy in the Horizon daily records. The 19 transaction will, however, be included in the grand 20 total value and volume reported to the cash account. In 21 addition, the individual totals on one or more Horizon 22 daily records may be wrong. This fault is due to be 23 fixed in December." 24 So this is the Post Office telling you that Horizon 25 records may not be correct? 79 1 A. Yes. 2 Q. Again, did this surprise you? 3 A. Err ... yes, I think it did surprise me, at the time. 4 This was handled by my assistant, Kevin -- very good -- 5 and it did surprise me. It surprised me because I saw 6 Post Office admitting now that there's something not 7 quite right with the transaction record. That surprised 8 me, but I was anxious to see a resolution to it. 9 Q. At this stage, were you aware of the Post Office 10 prosecuting any of your members on the basis of Horizon 11 data? 12 A. What's the date of this one? 13 Q. So this November 2000. 14 A. I was not aware, then, of prosecutions. If there were 15 any, I don't think I heard about it, really. 16 Q. Turning forward to the beginning of 2001, and if we 17 could call up NFSP00000557, so this is the National 18 Executive Council meeting, and if we turn to page 9 and 19 scroll down please, under "Horizon Implementation" it 20 says: 21 "Mr Peberdy reported that he thought that Don Grey 22 did his best to sort out problems with Horizon." 23 Did you agree with that? Did you feel that Don Grey 24 did a good job of sorting out the issues with the 25 Horizon? 80 1 A. I was taking advice on it from Mr Peberdy. 2 Q. Is that something we should ask him about? 3 A. Yes, I think so. 4 Q. If we turn over to page 10, which is the next -- and 5 then (f), thank you. Do you remember what Horizon 6 polling problems were? 7 A. No, I don't. I'm just reading on a bit. I would 8 imagine "polling" meant drawing information from post 9 offices. I don't know for sure. Sorry, can't help you 10 with that one. 11 Q. Thank you. Then moving forward again to March 2001, if 12 we can call up NFSP00000513 and if we could turn to 13 page 15. Scrolling down, please. Thank you. This 14 again concerns Horizon polling problems. Does any of 15 this refresh your memory? 16 A. I just have to take a minute to -- 17 Q. No, please do. Take your time. 18 A. I'm refreshing my memory and I can't say that I've got 19 a vivid memory of this but the second paragraph there, 20 about the Horizon problems, the stories that were told, 21 I mean, that's all very familiar to me. 22 Q. So picking up on that second paragraph about the money 23 held in the suspense account: 24 "He had been led to understand that there was 25 10 million in a suspense account now, as opposed to 81 1 2 million, 18 months ago." 2 A. Mm-hm. 3 Q. Was that something you were aware of at the time? 4 A. No, it wasn't but I was aware of it after John had told 5 me. 6 Q. Was it concerning to you? 7 A. Yes, I wondered how that happened, why it should be. 8 Because, as I go back, the contract says that the 9 subpostmaster makes good losses at the time. So is this 10 money that the subpostmaster put in that's in a suspense 11 account? Or is this money that it -- I'm asking you the 12 question, you don't know and I don't know -- or whether 13 it's a suspense account where subpostmasters should have 14 put £10 million in and haven't done. I don't know. 15 Q. If we could turn over the page to page 16 we can see 16 Mr Walsh asks a question: 17 "Mr Walsh asked a question about losses and gains 18 policy, whose responsibility was it when a claim for 19 money was sent out, whether it was put in as per the 20 loss and gains policy or whether the total amount should 21 be asked for. When Post Office Network requested 22 repayment of money, they would know in the losses and 23 gains policy they should only be asking for 25% plus 24 £2,000 if the loss was £10,000. Why did they not ask 25 for that immediately." 82 1 If we scroll down, Mr Morgan Jones highlighted 2 a particular case, which was a hostage situation, and 3 the subpostmaster was asked to pay 53,000 which was now 4 being reduced to 5,250: 5 "At the interview for the appeal the subpostmaster 6 was asked if he was insured and gave Mr Morgan Jones 7 a great deal of concern. Eagle Star provided a 5,000 8 cover under certain circumstances." 9 So at this stage, members are starting to raise 10 concerns about people being asked to repay quite large 11 sums of money on the basis of Horizon data; is that 12 right? 13 A. I don't know whether it was Horizon data, was it? Was 14 it highlighted particularly, as well? Hostage 15 situation? Um, I'm not sure whether that was due 16 because of Horizon, or whether it was due to the hostage 17 situation, whether the subpostmaster actually gave -- 18 was taken hostage and gave the money out. I don't know. 19 I honestly don't know. 20 Q. Turning forward, then, to 2003. If we could turn to 21 NFSP00000411. This is a letter that you received in 22 2003. If we could scroll down and on to the second 23 page. Scroll down, please. You received a letter from 24 a firm of solicitors saying: 25 "We have been instructed in connection with recovery 83 1 of a purported late account for a local Post Office. 2 The postmaster, however, is adamant that she did not 3 take that money. There is approximately 3,000 in 4 dispute. Our client vehemently believes that there was 5 a 'glitch' with the computer system that night which 6 cannot now be located. We are wondering whether you're 7 aware of any additional 'glitches' with such systems." 8 If we could turn back to the first page, we can see 9 your response, scrolling down. You said: 10 "I can advise that at the time of migration from the 11 manual system to the computerised one, a number of 12 subpostmasters complained of errors that had been 13 created by the system. We have no way here of knowing 14 whether such errors were as a result of the computer 15 system and, therefore, the matter was raised with Post 16 Office Limited. We are advised that all cases were 17 examined and some were found to be computer glitches 18 whilst others were zero." 19 So that was your response when this was raised in 20 2003, as a potential cause of a shortfall; is that 21 right? 22 A. Well, there's another paragraph to follow that one, 23 where I advised that the most productive way forward to 24 proceed would be for the client to request 25 an investigation. As to the system: 84 1 "... it should be able to identify all transactions 2 undertaken. If your client is a member of our 3 organisation, we will be pleased to request such 4 an investigation." 5 So it wasn't just left there. I actually did 6 suggest an action. 7 Q. Did you remember receiving this letter? 8 A. I do, yes. Yes. 9 Q. Did you think at the time that this might have been 10 a manifestation of the issues that we have discussed 11 today? 12 A. Yes, I thought it was a distinct possibility, yes. 13 Q. Do you think that you deferred too much to the Post 14 Office? 15 A. In as much as I was asking for an investigation into it, 16 we -- the National Federation of SubPostmasters couldn't 17 investigate into it because we weren't -- we don't know 18 the other end of the Horizon System and what was 19 happening there. Only the Post Office and ICL Pathway 20 could have undertaken that sort of investigation, but we 21 did urge a member -- I'm assuming a member -- to go down 22 that route. And what I've said in the final paragraph, 23 "We were pleased to request such an investigation". 24 I don't think we heard anything from that. 25 MS KENNEDY: Mr Baker, I don't have any further questions. 85 1 Chair, do you have any questions for Mr Baker at 2 this stage? 3 Questioned by SIR WYN WILLIAMS 4 SIR WYN WILLIAMS: There's just one, if I may. It arises 5 out of paragraph 20 of Mr Baker's witness statement. So 6 if that could be put on the screen and Ms Kennedy, if 7 you could give the number. 8 MS KENNEDY: Yes. It is WITN-- oh, there it is. 9 WITN03780100, just for the transcript. 10 SIR WYN WILLIAMS: If you'd look at paragraph 20, please -- 11 A. Certainly. 12 SIR WYN WILLIAMS: -- which is page 7 of 10 in the witness 13 statement. 14 A. Thank you, paragraph -- 15 SIR WYN WILLIAMS: That's it. This is all part of 16 a narrative which you've been taken through by 17 counsel -- 18 A. Yes. 19 SIR WYN WILLIAMS: -- as to the various things that were 20 happening, essentially from 1999 onwards, and I read 21 that paragraph as having occurred sometime in the year 22 2000, all right? So would you just read that to 23 yourself -- 24 A. Yes. 25 SIR WYN WILLIAMS: -- and see if I've got that right, 86 1 because it's talking about postponement of acceptance of 2 the system, et cetera, which would seem to mean that it 3 was either late '99 or 2000. 4 A. Yes, that's correct, and that's underscored, I think, by 5 the paragraph, "Complaints at that time were mainly 6 about training and delays in receiving help from the 7 helpline". 8 That was the feeling that we had at the time, yes. 9 That's about right. 10 SIR WYN WILLIAMS: What I want to ask you about are two 11 names about six lines down. First of all, is "David 12 Mills" correct or should it be "David Miller". 13 A. No, that's David Mills. 14 SIR WYN WILLIAMS: It is David Mills, that's fine. 15 A. He was David Miller's boss. 16 SIR WYN WILLIAMS: Then, for the first time in this phase, 17 the name "Paula Vennells" has cropped up. 18 A. Yes, indeed. 19 SIR WYN WILLIAMS: So could you explain to me your 20 understanding of what role Ms Vennells was playing in 21 1999/2000? 22 A. I would. I think she was the managing director of Post 23 Office Counters Limited. 24 SIR WYN WILLIAMS: Right, thank you. 25 A. So she was a pretty high up person. 87 1 SIR WYN WILLIAMS: Are you saying in that, where you use the 2 phrase "We continued to raise them with David Mills and 3 Ms Vennells", that you personally, either in writing or 4 orally, discussed these issues with Ms Vennells? 5 A. Yes. 6 SIR WYN WILLIAMS: Right. All right, thank you very much. 7 A. Yes, I did. 8 MS KENNEDY: Chair, we've given permission for Mr Stein and 9 Ms Page to ask questions. 10 SIR WYN WILLIAMS: Yes, certainly, yes. 11 Questioned by MR STEIN 12 MR STEIN: Mr Baker, good afternoon. My name is Sam Stein, 13 I represent a very large number of subpostmasters, 14 mistresses and managers. I'm going to take you 15 directly, please, to a document with the reference 16 POL00028530. 17 Now, Mr Baker, in your evidence you have stressed 18 that, without automation -- I quote from you, "without 19 account automation, we would be doomed. I'm sure it was 20 lifesaving for us". 21 That appears to have been an attitude that you've 22 expressed throughout your evidence. Now, I assume from 23 what you're saying in your evidence that you mean that 24 without automation, or your perception of what 25 automation can do, then many, many branch offices of the 88 1 Post Office would be closed? 2 A. Many sub post offices, yes. 3 Q. Yes, okay. 4 A. Eventually, closed. I didn't think the axe would fall 5 instantly. 6 Q. So that was the threat you were working under and 7 seeking to avoid; is that correct? 8 A. Threat? Yes, yes, I would concede that, although 9 I don't like the word threat, to be honest. 10 Q. Let's have a look at this document, then. This is in 11 November 1998, as you can see. "Restricted policy and 12 Commercial, Department for Trade and Industry". It's 13 for the attention of Jonathan Evans, from Isabel 14 Anderson, Postal Services Directorate. Can we go to 15 Relativity page 2, please. We'll see there that, under 16 the heading "Restricted policy and commercial", this is 17 the draft as at 6.30 pm on 13 November 1998, "BA/POCL 18 Automation Project". So this goes back to those 19 particular days, as you can see, that it included, at 20 that particular point, BA, and then it's 21 an interdepartmental working group report to ministers, 22 so we can see what this is about. 23 A. Yes. 24 Q. This is a briefing or a report to ministers in relation 25 to matters as of that time, okay? 89 1 Then if we can now move, please, to the bottom of 2 page 7 of 30. At this point in the document, the 3 document is going through various options, so if you 4 look at "Recap on the options", the impact of each 5 option on the Benefits Agency and the Post Office are 6 driven by the following key factors. So it's looking at 7 different options that are available for the possible 8 continuation of the project. Then under "Managing the 9 Changes to the Post Office Network": 10 "The response of the Post Office under each option 11 and in particular how any changes to the network will be 12 managed, would be an important factor in any decision on 13 the way forward. There are differences of view between 14 the parties on ..." 15 Then if we go over the page, please: 16 "... the ability of the Post Office to manage 17 changes to the network under each scenario." 18 Can we then concentrate, please, on "Key issues will 19 be", and the first one is how to maximise POCL's 20 existing customer base, as benefit payment switches to 21 ACT. Second one is how to maintain relations with 22 existing clients. Then the third one, please, and if we 23 can highlight the third bullet point "How to ensure", 24 that one, please -- thank you: 25 "How to ensure that the subpostmasters (private 90 1 agents who run the majority of the Post Office Network) 2 perceive that Post Office business can provide a viable 3 future and do not voluntarily exit the market (reducing 4 the ability of the Post Office to manage network 5 closures and migrate business to other offices)?" 6 A. I see that, yes. 7 Q. Okay. If we can go down to paragraph 21, and again 8 highlight paragraph 21 this time, please. So 9 paragraph 21 says: 10 "Under all options the Post Office will be seeking 11 to manage a reshaping of the network, against 12 a background of commitment to a nationwide network of 13 post offices." 14 I'm only pausing, Mr Baker, so you can make sure -- 15 A. No, okay, I was following you. 16 Q. I understand, but just so that you're comfortable with 17 having your glass of water. 18 A. Okay. 19 Q. "Under all options the Post Office will be seeking to 20 manage a reshaping of the network, against a background 21 of commitment to a nationwide network of post offices. 22 Their objective is to retain the current levels of 23 access, particularly in rural areas, but to reduce 24 over-provision in some urban and suburban areas, 25 replacing some physical offices with electronic access 91 1 points. Current trends would, in any case, see 2 a reduction in the rural network by some 200 offices 3 each year, and a gradual shift to ACT-based methods of 4 payment over time (by 2009/10 almost 50% of claimants 5 are expected to have switched to ACT). 6 "Compared to the current network of 19,000 offices, 7 POCL believe that their vision for the future could be 8 served by a network consisting of around 11,000-13,000 9 full service offices supplemented by 5,000-10,000 10 electronic access points, many of which could continue 11 to be sited in existing Post Offices ..." 12 So in November 1998 were you aware of this vision 13 that the Post Office had regarding a substantial 14 closure? 15 A. No, I wasn't. And I would have been surprised if they'd 16 have shared it with me, to be honest. 17 Q. Do you see that, under the third bullet point, what's 18 being set out here in the briefing to ministers is that, 19 bearing in mind what you can see in paragraph 21, that 20 what was being thought to be appropriate was to "ensure 21 that subpostmasters, (private agents who run the 22 majority of the Post Office Network) perceive that Post 23 Office business can provide a viable future". 24 You're an ex-subpostmaster yourself, I don't know 25 how you funded your own Post Office branch, but you'll 92 1 understand that many people had loans -- 2 A. Oh, I had a loan. 3 Q. -- they invested their own funds, savings into it. 4 A. Yes. 5 Q. They did that in the hope that they would have a settled 6 provision for the future? 7 A. That's correct. 8 Q. They hoped that the money from the Post Office and the 9 money they'd get from any associated other business that 10 they'd run alongside the Post Office would provide them 11 with a reasonable income and, hopefully, therefore, 12 provide them with an income to satisfy their children's 13 needs, their own needs, and indeed retire in the future? 14 A. Yes. 15 Q. Okay. So presumably what you were doing, Mr Baker, was 16 that you were seeing automation as being, in your mind, 17 the best way to preserve this big network of 18 18,000/19,000 offices -- 19 A. Yes indeed, yes indeed. 20 Q. -- precisely for the reasons that I've just gone 21 through, which is that these are hardworking people who 22 had put in a lot of time and effort -- 23 A. We were already doing a lot of other things as well, 24 regarding compensation of office agreement with the Post 25 Office Limited, so that should the axe fall on any 93 1 particular sub post office, that subpostmaster could be 2 compensated. That was a negotiation by the National 3 Federation of SubPostmasters, one of which I'm proud, 4 because there was something there for the subpostmaster 5 should the axe fall, because the subpostmasters' 6 contract is in the gift of the Post Office. And, you 7 know, we've got to prepare our members for should that 8 happen. 9 Now, with that compensation agreement, some 10 subpostmasters volunteered closure. It was worth their 11 while to go, and -- because maybe they could see the 12 writing on the wall. But that is most definitely -- 13 it's impeccable, what you've just read out there. 14 That's true. But we had to seek to address it, and 15 that's something else which we would do. 16 Q. You say it's true but were you aware of this vision? 17 Did you understand that -- 18 A. I wasn't aware of the vision. No, I was aware that 19 there's plenty of facts in there but I was not aware 20 that that was the Post Office vision. No. 21 Q. What would you have done -- 22 A. Um -- 23 Q. -- if you knew this? 24 A. Well, what I would have done and what I did was champion 25 something called the ... I've left my papers behind -- 94 1 it was a Government report, of which we had a great say 2 in it, and the Prime Minister, Tony Blair at the time, 3 came out in favour of it, and it stressed there what we 4 should do. I haven't got it with me. It was the PIU 5 report. 6 Have you read it, sir? Can I recommend it to you. 7 Thank you. 8 Q. Do you feel as though you were misled by the Post Office 9 if this was what they had in mind, this intention to 10 cut, by well over a third, the Post Office in 1998 -- 11 A. I don't think I was misled because -- 12 Q. -- using the very system of automation that, in fact, 13 you championed. Do you consider that you were misled by 14 the Post Office? 15 A. No, sir. 16 Q. Why not -- 17 A. I consider -- 18 Q. -- because, here you are, championing the automation of 19 the project and, in fact, they intended it to cut 20 massively? 21 A. But they didn't. Influences were at work, not least of 22 those of the National Federation of SubPostmasters, who 23 got this PIU report -- and I too recommend you read 24 it -- then you might reconsider your question to me. 25 You might. 95 1 Q. Mr Baker, the position of the National Federation of 2 SubPostmasters appears to have been to essentially 3 attempt to work with the Post Office to get the 4 automation set out within all of the Post Office 5 branches, yes? 6 A. That is absolutely correct sir, yes. 7 Q. Did that mean that you had to keep facts back from your 8 own membership? 9 A. No. 10 Q. No? So you adequately told them, did you, at all times, 11 about the problems that you were aware of? 12 A. Yes. In fact, you've probably got all the evidence that 13 I've got, two folders full of it, meetings with the 14 Executive Council, meetings with the branches. In 15 addition to that, we had a subpostmasters journal, The 16 SubPostmaster it was called, monthly, and there was to 17 and fro exchange of information, and I didn't keep 18 anything, particularly the naughty stories, I didn't 19 keep them from you at all. I believed that because they 20 got a lot of money invested in it, that they deserved to 21 know which way was up, personally. 22 Q. All right, Mr Baker. I'll leave it there. You may have 23 been told by the Inquiry that you're expected to return 24 at a later stage -- 25 A. No, I haven't been told that. I look forward to it. 96 1 Q. You're expected to return at a later stage in the 2 hearings, Mr Baker, and we look forward to seeing you 3 then. 4 A. Thank you very much indeed. 5 Questioned by MS PAGE 6 MS PAGE: Mr Baker, I am Flora Page, I'm also representing 7 a number of subpostmasters in the proceedings. 8 A. Nice to meet you. 9 Q. Can I just clear up something to start off with, which 10 I expect is just that somebody else bears your name. 11 I just want to clear this up. 12 A. Okay. 13 Q. A "Colin Baker" appears occasionally in technical fault 14 documents on ICL. You never would have seen those, 15 would you? 16 A. I would be the last people to be pointing faults to ICL, 17 to be honest with you. 18 Q. No, thank you. That's, just, as I say, to clear that 19 up. 20 Can I then, please, look at a slightly different bit 21 of a document we've already looked at, which is 22 NFSP00000203, and this is the report of the Horizon 23 Working Group meeting, which was interjected into the 24 middle of your NFSP meeting. 25 A. Okay, yes. 97 1 Q. As I understand it, you were at your NFSP meeting, you 2 went to the Working Group, and then you returned. If we 3 go down, please, to paragraph 6, I think it is. 4 A. Thank you. 5 Q. Yes, actually, sorry. I do apologise. If we start off, 6 first of all, with paragraph 4. You've looked at your 7 interjection in paragraph 5 but I just want to look at 8 what's said either side of your interjection. We've 9 looked at the fact that Ms Rego had pointed out some 10 emerging issues around acceptance and, over the page, 11 she says -- or at least I suspect it was her who says: 12 "There was a need to establish exactly what it was 13 POCL was buying. ICL have not allowed access to POCL so 14 that they could determine this and have insisted that 15 this is not a contractual issue. They have, however, 16 indicated that they are willing to talk informally. 17 POCL consider the issue to be too important to the 18 commercial future prospects of the project to rest on 19 a purely informal and unenforceable indication." 20 That, no doubt, is what you were reacting to when 21 you said it was extremely important for the rollout to 22 be absolutely right. So, in effect, what they're saying 23 here at this quite important juncture, after the Post 24 Office has relatively recently gone into the bilateral 25 agreement, they're saying they don't really know what 98 1 they're buying and that ICL aren't giving them access to 2 it. 3 A. Yeah. 4 Q. So, no doubt you're saying, "Well, hang on a minute, we 5 need to know what this is all about before it's rolled 6 out". 7 What I want to look at is the next paragraph where 8 Mr McCartney, the Minister of State, said that rollout 9 was crucial. He was emphatically not prepared to accept 10 getting away from the commitment to 2001: 11 "Slippage would make the wider discussions on 12 Government usage of the network impossible. If there 13 were problems with software, training, etc, then these 14 should have been flagged up earlier and must now be 15 resolved in a way that enabled the 2001 timetable to be 16 recovered." 17 Now, was that really "automation at any price", 18 there? 19 A. Well, you're quoting Mr McCartney's words to me, and 20 I suppose it could be interpreted as that, yes. What -- 21 my bit about -- my comments relating to "automation at 22 any price" was the way in which subpostmasters were 23 browbeaten and treated. That's the price I found 24 unacceptable. 25 Q. All right, well -- 99 1 A. But we can talk about getting the bits and bobs right, 2 you know, the software and hardware and position on the 3 counters, and the helpline and -- that was work in 4 progress all the time. But the bit that I found totally 5 unacceptable was that: the treatment of subpostmasters. 6 Q. All right, well, we'll come back to that. But what 7 Mr McCartney here is saying is that, in effect, this is 8 going to be pushed through no matter what, isn't he: 9 2001 is happening? 10 A. Yeah, that's what he's saying there, yeah. Whether that 11 was fact or not, I don't know, because we -- you know, 12 we got told some stuff. 13 Q. Well, when you then go back to your meeting -- and so if 14 we can now have a look, again, at NFSP00000203, and if 15 we go down to page 23, I think it is. 16 MS KENNEDY: I'm being told that's the same document as 17 earlier. 18 MS PAGE: I'm so sorry, I've cited the same reference. Hang 19 on for a moment. 20 Sorry, it's NFSP00000471, and it's page 29, in fact, 21 that I wanted to zoom in on. In that large paragraph in 22 the bottom half of the page, about partway through, this 23 appears to be you reporting back on your view on 24 Mr McCartney. It tells us that Mr McCartney appeared to 25 be wholeheartedly in favour of preserving and improving 100 1 the Post Office system. That's sort of just over 2 halfway down the big paragraph; do you see that? 3 A. Yes. 4 Q. "It was felt by Mr Peberdy and Mr Baker that he would be 5 a valuable ally in the struggle for replacement of the 6 lost benefits work, with other government usage of post 7 offices." 8 A. Yes. 9 Q. "We hope that he will remain in the job long enough to 10 see the project through to fruition." 11 A. Here we go. 12 Q. So, in other words, your take on Mr McCartney was his 13 determination to see this through, even if there were 14 software problems, was a good thing? 15 A. Well, it was wider than that, if I could put words into 16 Mr McCartney's mouth. It was wider than that, and the 17 references to utilising the network for other things 18 other than Benefits Agency payments, because by then we 19 knew that the axe was going to fall on Benefits Agency 20 payments. So what Ian McCartney was saying, and whether 21 it's all documented there I couldn't say, but he was 22 onside with the other things that subpostmasters could 23 do. 24 And some of the things in the PIU report was 25 subpostmasters, with the use of automation, could be 101 1 general practitioners for government. A one-stop shop 2 to go and access government -- motor vehicle licences, 3 forms, that sort of thing, you could get from the local 4 Post Office. And if you could imagine the vision, 5 certainly the vision I had, and I think it was shared 6 with many people -- was there was this ubiquitous 7 network standing there ready to enable people to go and 8 interrogate government, to -- we could give them all -- 9 we could give them bus timetables, we could do all sorts 10 of things because we'd got the automation there to do it 11 with. 12 That was the vision, and I think that Ian McCartney 13 actually shared that view, not the precise detail, but 14 shared the view that there were more things that the 15 Post Office could do. 16 Q. If we could just take the document down for a moment. 17 So what I think you're saying, and you'd tell me if I'm 18 wrong, is that there were two sides to what Mr McCartney 19 was saying. On the one hand, he wanted to get this done 20 absolutely on time? 21 A. Mm-hm. 22 Q. He had no hesitation in saying "Software problems, 23 I don't mind about that, I want to get this rolled out". 24 A. Yes. 25 Q. But, on the plus side, he had this vision for what 102 1 Horizon was going to be able to do and, ultimately, 2 perhaps that's what you're talking about when you 3 referred to the PIU report in -- 4 A. That's exactly what I was -- 5 Q. That's where that was all -- 6 A. Have you read it, madam? 7 Q. I have. 8 A. Good, innit? 9 Q. I'll come back to that perhaps, as well, if I have time, 10 but the point is that, at this juncture, despite what 11 you've told us was ringing in your ears about the trauma 12 of people's experiences with the software -- 13 A. Mm-hm. 14 Q. -- you were prepared to see him as an ally with that 15 software rolling out, no matter what, because of what 16 you could get out of it, what you saw you were able to 17 get out of it in the future? 18 A. I think that's an extremely black and white view of the 19 world -- of my world, as it was at the time. I go back 20 to saying that we saw automation of post office counters 21 as the answer to our problems, okay? Not Pathway, not 22 ICL. Automation of post office counters. And it was 23 essential that that came along because of all the other 24 things it brought with it. Ian McCartney seemed to have 25 a grasp of that. 103 1 His job was to get the thing delivered. That wasn't 2 my job. That was his job, to get it delivered. And 3 he's making the statements that he makes because that's 4 his job. My job is to protect and defend the interests 5 of subpostmasters and, by doing that, I'm also thinking 6 about their business and their livelihoods and all that 7 sort of thing as well. So, to some extent, we come from 8 different positions, but it's as well that you 9 understand other people's opinions and what they are 10 about before you can actually get a good negotiation 11 with them. 12 So, yeah, he seemed to be saying the right words, 13 and I'm sure that he was saying those words because 14 somebody had got a knife in his back saying, "You'd 15 better deliver it or not". 16 Q. All right. Well, if I may then, there's another 17 document I'd like to put to you, which is 18 CBO00100006_074. 19 A. Yes. 20 Q. If we could perhaps zoom in a bit so it's a bit easier 21 for us to read. 22 A. Thank you. 23 Q. What we can see is that this is a letter to the 24 Chancellor and, if we go down to the end -- I think 25 we're nearly there -- it's from Mr Byers. What it tells 104 1 us -- sorry, if you don't mind, if we go back to the 2 beginning -- is that in July 2000 Mr Byers was rather 3 pleased that he'd been able to keep you on board. This 4 is in relation to the PIU report, and he says at the end 5 of that top paragraph: 6 "We achieved a key objective of securing public 7 support from Colin Baker." 8 Next paragraph: 9 "Much remains to be done, however. There has been 10 a good deal of criticism of Colin's stance from elements 11 within the NFSP who believe that the commitments made in 12 our response to the PIU report lack sufficient substance 13 (and this will be a recurring theme until we're able to 14 attach [pound signs, I take it or million pound signs], 15 to specific funding packages when we announce SR2000, 16 about which I've written about separately). Unless we 17 are able to show regular and tangible progress with the 18 implementation of the package, there is a real risk that 19 Colin will be unable to hold his line with his Executive 20 Council and the wider membership. 21 "A resumption of the Federation's campaign, 22 accompanied by accusations that the Government has shown 23 itself to be cynical and duplicitous on this issue would 24 be politically disastrous and I therefore look to EA 25 colleagues to cooperate fully in taking forward urgently 105 1 the various elements of the package." 2 He says: 3 "Nowhere is this more true than in respect of the 4 universal bank", and he goes on to talk about how 5 important that particular element of it was. 6 So is that right: was there a real difficulty with 7 holding the line, as it were? 8 A. One of the tools in the General Secretary's bag is to 9 threaten the Government with dire action from his 10 members. 11 Q. Certainly. 12 A. "I can't control the member's, Governor, you know, 13 they'll do what they want to do". 14 Q. So, to some extent, this was a little bit of 15 negotiation, was it, with the Government? 16 A. It was precisely that, yes. 17 Q. All right. So would you say you were carrying, 18 reasonably easily, the NFSP with you? 19 A. No, I wouldn't say I was carrying them easily. There 20 was one or two of them that would call for my 21 resignation, and other things. Horrible stuff. It 22 wasn't the easiest of rides. But I always had my eye on 23 the goal, and that goal was a network of automated post 24 offices. And can I just remind -- if you don't mind -- 25 saying that we set out to get counter automation for 106 1 post offices and, at the end of it, every -- 2 Q. Can I interrupt to say the document can come down, so 3 that the Chair can see you. 4 A. Oh right. Hello. 5 Q. Please do go on. I'm so sorry. 6 A. Okay. I'm proud of the results of the negotiations that 7 we carried through all that period. Not every post 8 office is automated now but every single counter 9 position in every Post Office, at no cost to the 10 subpostmasters, no cost to our members. So I don't know 11 how you measure success, but I think that was 12 a successful period. Now, in part, there were some 13 subpostmasters that want to nibble at my ankles, that's 14 fair game. I've always said the tallest tree gets most 15 of the wind and I got a fair bit of it. 16 Q. The point is, isn't it, that you achieved your goal of 17 automating the Post Office, but along side that, we know 18 that between 2000 and 2014, 736 subpostmasters were 19 prosecuted on the basis of Horizon evidence, or at least 20 736 -- that's a figure that has been put about. What 21 did your organisation do to join the dots and recognise 22 that this unlikely crime wave was actually a result of 23 implementing Horizon? 24 A. When I was General Secretary of the organisation, we 25 were consistently beating a path to the Post Office's 107 1 door, consistently. And it included up to and including 2 the counter losses. But I've said before, the -- it was 3 a slow roll, these Horizon losses. And I retired in 4 2007, so I can't say anything about what happened after 5 then, forgive me. But I think we did our absolute 6 utmost -- I don't know how many of the 700 or so were 7 pre-2007 or post-2007. I've not seen that information. 8 I don't know whether all or any were members of the 9 Federation. I don't know whether all or any actually 10 referred it to the Federation. So it's not a question 11 that I would attempt to answer, and I would venture to 12 suggest it's not a question you should attempt to ask. 13 Q. Well, we may come back to that, Mr Baker. 14 A. Okay. 15 MS PAGE: Thank you. Those are the question is have for 16 now. 17 SIR WYN WILLIAMS: Thank you very much, Mr Baker, for taking 18 the trouble to write a witness statement but perhaps, 19 more importantly, taking the trouble to answer very many 20 questions this morning. 21 MS KENNEDY: Chair, I'm so sorry, we also have questions 22 from Ms Watt from the NFSP. 23 SIR WYN WILLIAMS: Right. 24 Questioned by MS WATT 25 MS WATT: Thank you, Chair. Just a couple of questions 108 1 arising from the evidence that has been given. Thank 2 you very much for allowing these to be asked. 3 Mr Baker, you gave evidence earlier about, in the 4 pre-Horizon situation, of how discrepancies or errors 5 could arise on balancing, and I just wondered if, in the 6 wider context of how such errors, as you described 7 occurring, of when we hear about the post-Horizon errors 8 that you were asked about, is every error that arose 9 there as a result of Horizon, as far as you can tell? 10 A. I couldn't possibly tell. I wouldn't know what was 11 an Horizon error and what wasn't, unless I knew exactly 12 what was going on in that particular Post Office. And 13 I'm reliant, as I hope, anyway, you can grasp -- I'm 14 reliant on the information that's fed to me, and then 15 I have to test that information. So if a non-member 16 tried -- if it was a non-Horizon error, that I think 17 we've already touched on one today, where it was 18 a hostage situation. You know, so you've got to analyse 19 them all. But no, absolutely not. 20 Q. You talked about hindsight in your evidence -- 21 A. Yes, indeed. 22 Q. -- and what you know now. But, at the time, were you 23 working on this -- for instance, the Horizon Working 24 Group and in any other situations, with other 25 representative bodies, those who represented other 109 1 employees or managers, as well as the NFSP, and how were 2 you working with them? What were they doing? 3 A. I don't know what they were doing offline, I'm sure, but 4 in the meetings, some were quite vocal. Some were not 5 so vocal. I think I was an irritant, maybe the grain of 6 sand in the oyster, perhaps. I get the impression -- 7 I mean, there was a vast array of people, there were 8 ministers and all sorts -- I think probably I was one of 9 the most vocal but there were others. I think -- yeah, 10 I think I was one of the most vocal. 11 Q. Can you recall who else was involved? 12 A. I think the General Secretary of the CWU was involved 13 and he had a word or two to say. And I don't think the 14 Post Office was saying much at that time, but I don't 15 know what meetings were had before or after, you see. 16 So, again, it's a wise man who knows what he doesn't 17 know. 18 Q. Just staying with the theme of hindsight, thinking about 19 that, do you think that you or these other 20 organisations, based on what you knew at the time could 21 have foreseen what was going to happen? 22 A. No, we couldn't foresee that. I mean, we were 23 focused -- as we've said, in the meeting, we were 24 focused really on the Horizon platform and losses, 25 counter losses, at that time, stood outside of that, 110 1 really. I mean, they only came flowing in when we 2 realised just how many there were, and that was 3 post-those meetings that we were having. So no, in no 4 way could we envisage that. 5 Q. Just to sum up from your evidence, in the light of all 6 that you've said and been asked and what you now know, 7 in what way do you feel, in your time as General 8 Secretary, that you and the NFSP represented all the 9 interests of your members in relation to the Horizon 10 scheme. 11 A. Yes, I do, in fact, we were championing counter 12 automation, not only for subpostmasters but the whole 13 network, the CWU and CMA and people of that nature. So, 14 yeah I think we were all right. I think we did okay. 15 Thank you. 16 MS WATT: Thank you. No further questions. 17 MS KENNEDY: Thank you. Chair, I have one clarificatory 18 re-examination question. 19 SIR WYN WILLIAMS: Of course. 20 Further questioned by MS KENNEDY 21 MS KENNEDY: When you were asked questions by the Chair 22 a moment ago, about paragraph 20 of your witness 23 statement, David Mills and Paula Vennells, you were 24 asked about whether you were speaking to Ms Vennells in 25 the year 2000. Ms Vennells didn't start at the Post 111 1 Office until 2007. 2 A. Yes. 3 Q. So you wouldn't have been speaking to her in the year 4 2000 about these issues? 5 A. No, that's true. Thank you for that. Yeah, it would be 6 who Paula Vennells replaced, which I think was David 7 Miller. 8 Q. Thank you. 9 A. But David Mills was the -- I think he was Chief 10 Executive or Chairman or something. He was pretty high 11 up, David Mills, yeah. 12 MS KENNEDY: Thank you, chair. I have no further questions. 13 SIR WYN WILLIAMS: I launched into a thanks to you, 14 Mr Baker, when I was told very politely that the session 15 hadn't ended. So I think it has ended now, but my 16 thanks remains the same. Thank you very much for 17 coming. 18 A. Thank you, Mr Chairman. 19 And all the participants in this, I wish you every 20 success with this Inquiry. It needed doing, and I wish 21 you every success. Thank you. 22 SIR WYN WILLIAMS: Thank you. 23 Are we going to take an hour and then safely 24 complete Sir Ian McCartney this afternoon, as far as 25 you're aware? 112 1 MS KENNEDY: Yes, Chair, as far as I'm aware, coming back at 2 2.00, so taking the full hour for lunch. 3 SIR WYN WILLIAMS: Fine, very good. So then that's what 4 we'll do. 5 MS KENNEDY: Thank you. 6 (12.53 pm) 7 (The Short Adjournment) 8 (1.57 pm) 9 MR BLAKE: Good afternoon. 10 SIR WYN WILLIAMS: Good afternoon. 11 MR BLAKE: You should be able to see both myself and Sir Ian 12 McCartney. 13 SIR WYN WILLIAMS: I can indeed. 14 MR BLAKE: Excellent. Can we call Sir Ian McCartney, 15 please. 16 SIR IAN McCARTNEY (affirmed) 17 Questioned by MR BLAKE 18 MR BLAKE: Thank you very much, can you give your full name, 19 please? 20 A. My name is Ian McCartney. 21 Q. Thank you very much, Sir Ian, for attending today. You 22 should have in front of you your witness statement -- 23 A. Yes. 24 Q. -- dated 27 September of this year; is that correct? 25 A. Yes, and my signature -- 113 1 Q. Is on page 33 -- 2 A. Yes. 3 Q. -- is that correct? Is that statement true to the best 4 of your knowledge and belief? 5 A. Yes, indeed. 6 Q. Thank you very much. 7 A. Before you go any further, sir, could I just point out 8 to the left of me is my friend and neighbour, Mr Adrian 9 Blundell(?), who signed a confidentiality undertaking 10 for yourselves, and he's here solely to pass any 11 materials or deal with issues around my health profile, 12 if required. 13 Q. Absolutely, and he has no personal involvement in any 14 matters relating to the Horizon project? 15 A. No, none whatsoever. 16 SIR WYN WILLIAMS: That's fine, Sir Ian. That's fine. 17 A. Thank you. Thank you, Sir Wyn. 18 MR BLAKE: So your witness statement is WITN03370100. That 19 statement will go into evidence and the questions that 20 I'll ask you today will be supplementary to that. But 21 I will begin just with a brief background. You've set 22 out your professional background in quite a lot of 23 detail in your witness statement. 24 For the purpose of your appearance today, the most 25 relevant is that you were minister in the DTI with 114 1 responsibility for postal affairs following the May 1997 2 election; is that right? 3 A. That is correct. 4 Q. That was until 2001 when you moved to the DWP as 5 Pensions Minister? 6 A. No. 7 Q. No? 8 A. To 1999, that's when I moved to the Cabinet Office, and 9 such was my duties as a minister that he decided to then 10 send me to the Department for Work and Pensions. 11 Ironical. 12 Q. In 2003, you, I think, rejoined the Cabinet Office as 13 a minister without portfolio; is that correct? 14 A. That's right, yes. 15 Q. Then in 2006 you were appointed as Minister for Trade 16 and Foreign Affairs, and you left government when Gordon 17 Brown became Prime Minister and you retired from 18 Parliament in 2010. 19 A. That's correct. 20 Q. Thank you very much. I'm going to begin by asking you 21 about the information that you were provided with when 22 you became a minister. You have described in your 23 statement, it's paragraph 26 of your witness statement, 24 that you were briefed about the Horizon project when you 25 began, albeit you were briefed on a number of other 115 1 things at the time as well. 2 Were you aware that Pathway was the least preferred 3 bidder from a technical perspective during the 4 procurement phase? 5 A. No, and indeed we knew nothing about the procurement 6 phase and decision making, as it had been done by the 7 previous Conservative administration. I do not make 8 a point here -- a party political point -- where it was 9 a situation where a number of us ministers asked if we 10 could see the documentation to try to ensure, rather 11 than assure, ourselves as to precisely what the 12 agreement was and the reasons behind the arrangements, 13 and what was set out there for the disputes and the 14 resolvement of disputes. 15 And I wasn't interested in a partisan political 16 discussions. It may have been in some documents. 17 That's no problem. But the fact that we weren't allowed 18 to see is an issue, I think, it's still not resolved by 19 governments today, and it's something that should 20 because it also harms any Inquiry like this one, who I'm 21 sure would have liked to have access to the documents as 22 well as ourselves at the time. 23 Q. We have seen quite a lot of those procurement documents. 24 A. All right. 25 Q. We've also looked at the rules, for example, through the 116 1 Directory of Civil Service Guidance from around the 2 time. It seems as though the rules do allow for sharing 3 of information for continuity of policy reasons. Were 4 you aware of that at the time? 5 A. No. No. 6 Q. Did you ask for the specific documents or did you ask 7 for information relating to the procurement process? 8 A. No, I asked for access to the decision-making process, 9 and I think ministers at the DSS, and certainly my 10 Secretary of State, and I'm assuming a colleague at the 11 time at the Treasury. 12 Q. Do you recall who you asked for that information? 13 A. No, the Secretary -- to be honest with you, it wasn't -- 14 I didn't go to the Permanent Secretary, or anything like 15 that. It would be through my personal assistants in the 16 office. I left that to them to provide me with 17 an answer. 18 Q. Thank you. That would be your ministerial private 19 office? 20 A. Yes, indeed. 21 Q. Thank you. Paragraph 37 of your witness statement, you 22 have said that ICL and Fujitsu were a huge multinational 23 company with technical expertise, and you would have 24 thought that when ICL were originally appointed, this 25 was on the basis that the persons who appointed them 117 1 also had that same expectation. Was that something you 2 ever discussed, the fact that they were a large 3 corporation or something along those lines? Were you -- 4 A. No, but the situation was that there were a few 5 companies in the marketplace who were large and 6 significant players in what was a growing global 7 industry, seeking out contracts with governments on 8 these types of issues. And my expectation was that only 9 companies with technical abilities and knowledge and, in 10 some instances, obviously the skills -- not in some 11 instances, in all instances -- the skills. 12 And, as we went into this review, and decisions, to 13 see whether we could save it, continue it, or release it 14 and start again, it became obvious to me that both in 15 the public sector and in the private sector, there was 16 a real shortage of technical expertise and, indeed, in 17 the private sector, I would say there was a -- there was 18 a dodge being played that when they sat down with 19 governments, they would bring in their group of highly 20 skilled professionals to outline the proposals. But, 21 subsequent to that, it was more junior ranking and less 22 qualified people that were then put in place to take on 23 the contract if it was offered to them. 24 Q. Thank you very much, we may go into that in more detail 25 when we look at your reports that you authored. The 118 1 procurement process began in 1994. ICL Pathway was 2 selected in 1996. When you arrived in your office in 3 1997, what did you understand, if anything, about 4 technical concerns relating to Horizon? 5 A. I knew nothing, but that doesn't mean that anything was 6 kept away from me, in the sense that we'd just become 7 a government and it was normal practice -- the first 8 thing after saying hello to everybody, was to get these 9 red binders. In my case, there must have been about 20 10 of them, which rather shocked me, how many there were, 11 and one of them was the Post Office. It might even have 12 been two from the Post Office, first and second class 13 delivery. 14 And we -- my task then was to very quickly acquaint 15 myself with the issues in the documentation from the 16 Civil Service but, also, I came into office with a list 17 of already -- priorities already in the public domain, 18 which included employment relations, the social 19 chapter -- I'll not go into that -- and issues around 20 the creation of a low-pay commission and the creation of 21 the National Minimum Wage. 22 Q. Thank you very much. You described a tug of war between 23 the Department for Trade and Industry and the Department 24 for Social Security when you entered government. We've 25 heard about that quite a lot already but can you briefly 119 1 give us your take on that tug of war? 2 A. Yes, I was shaken from my naivety that government across 3 Whitehall all worked together, hand in hand, and in the 4 same order marching bands would do. But very quickly 5 I realised that this project had been established -- and 6 it wasn't the first time and I doubt that it had been 7 the last project where two departments with competing 8 interests were brought together and those interests were 9 legitimate, by the way, from the point of view of the 10 then Department of Social Security and the Benefits 11 Agency, and from the Department for Trade and Industry 12 in relation to the Post Office Counters Limited. 13 But because of this from the outset, and no central 14 structure in place across Government to determine the 15 priorities for the programme -- I'm assuming this 16 because I haven't seen their papers -- but no programme 17 was available that set out who would be a customer, who 18 would be the provider and who, in all of this, would be 19 responsible to ensure the project was indeed agreed 20 fully; that it was transparent, the responsibilities in 21 the project; that there was a process in place, again 22 transparent to deal with issues as there always is in 23 IT, issues around complexity, quality of the work being 24 done; and, thirdly, a timetable to ensure the work and 25 the financial situation were closely monitored and 120 1 regularly updated. 2 And what I found from the outset, was that the 3 ministers in both Departments -- that includes myself 4 and others -- were deemed -- basically put in the 5 position of "Here's the historical situation from our 6 area of interest, and here's the other interest area". 7 And then the other minister, if you spoke to them, they 8 would give to me their interest in the area, and their 9 expectations and also, if the expectations weren't met, 10 what their intentions would be. 11 And that's where it was obvious this was a very 12 difficult, difficult situation with probably a breach in 13 people wishing to trust each other, certainly a lack of 14 trust completely in ICL, and a legacy, to the point 15 that -- the mistrust had got so complex itself, that was 16 added on to the complexity of the programme, the policy, 17 and that made it an absolute quagmire in terms of 18 finding potentially a way forward out of it. 19 Q. You've said a lack of trust "in ICL" or was that "by 20 ICL"? Sorry, which one. I didn't quite hear that? 21 A. No, a lack of trust in ICL by the players involved, 22 their customer base. It should have been at the outset, 23 a contract -- this is my view -- a contract with Post 24 Office Counters Limited and that BA was the customer, 25 and the customer required to be satisfied from the 121 1 outset that what was being constructed would meet their 2 requirements as a business going forward. 3 But it was also true at the time of the changes 4 taking place in IT -- IT -- it had a huge potential 5 impact on the world's post offices and, in our respect, 6 into the Post Office here. As well as having financial 7 obligations, there was political obligations put on them 8 by successive governments, including my own, to have 9 a social input in terms of the structure of the company, 10 the services that were provided across the board in the 11 three companies that were the Royal Mail. 12 Q. Thank you very much. You've mentioned the Department 13 for Trade and Industry and the DSS. We know that the 14 Treasury also became involved. 15 A. Mm. 16 Q. We heard quite a lot of that yesterday but, again, can 17 you give us your take on the Treasury's involvement and 18 the impact that it had? 19 A. Yes, clearly the Treasury had responsibilities for the 20 PFI programme -- the PFI programme which covered the 21 previous Government and, of course, the incoming 22 Government also had decided to utilise PFI in a whole 23 range of areas. Easiest ones are things like 24 construction, refurbishment, that type. IT was of 25 a different magnitude, in my view. It was significantly 122 1 more complex. It was an evolving -- I know there's 2 a science -- but an evolving way of doing business and, 3 with that, the complexities of doing business in a way 4 that you were always making the funding up as you went 5 along, and so the Treasury indeed had a huge interest. 6 And, of course, we had technical expertise in 7 Montague, who I think, also, my first recollection of 8 him -- I think he's a Sir now, isn't he? Adrian, isn't 9 it? 10 Q. Yes. 11 A. Sir Adrian. I may be wrong and I apologise if I am, 12 I think he was known to us when he came into office 13 because of his work on the project in the Channel Tunnel 14 with him and another colleague he subsequently came with 15 us, Mr Corbett. And so he had a significant knowledge 16 and skill in relation to these subjects but, even in IT, 17 I would imagine it would stretch him as well. 18 Q. Absolutely, and we'll come to his report shortly. Can 19 we start, though, with your report, which was later on. 20 When was your report? I don't actually think it has 21 a date on it. 22 A. It was in 1999, after I moved, and so it was between 23 1999 and 2000 it was published. 24 Q. Thank you very much. Can we look at it it's 25 WITN03370101. 123 1 A. And could you, from that perspective -- 2 Q. If you'd like to look at your hard copy, it's tab B1. 3 A. Thank you. 4 Q. I'm going to look at page 12. Before I get to that, 5 what was the purpose behind this report? 6 A. Right. It's one of those occasions where you get moved 7 in Government reshuffled, and you get reshuffled, and 8 there's a lot of nuggets of potential activities, which 9 aren't on the front of the tin or printed on the tin of 10 the job, and this was one of them. And it became 11 particularly clear to me that there was an opportunity 12 here to learn significantly from my experience on 13 Horizon what became clear in talking to officials in the 14 Cabinet Office, and the fact that the Government were 15 contemplating the establishment or having the 16 establishment of an IT czar, that there was room here 17 for significant work to be done, and the situation was 18 particularly bad across all parts of Government, and 19 indeed, in terms of the skills or lack of skills across 20 Government dealing with these companies, coming from 21 a -- taking us to the cleaners. 22 Q. Is it fair to say that Horizon is cited throughout this 23 report as, essentially, an example of what to avoid, in 24 many respects? 25 A. Horizon -- and some of the report has been anonymised in 124 1 the sense that, to get cooperation from both public and 2 private sectors, we engaged a range of different 3 organisations with different types of IT projects, and 4 the skill mix, as you'll see on the membership of the 5 group of us who looked into this matter, was extensive. 6 And what we found was that, across the piste, there 7 were substantial issues of a fundamental nature. Not 8 just the structures of Government, the structures in 9 terms of the way in which procurement took place, the 10 lack of structure and the lack of skilled personnel to 11 plan and then to implement, and there were also, across 12 the piste, huge gaps in the management of complex, and 13 sometimes not so complex but they become complex because 14 of mistakes -- of IT projects, both in the public and 15 the private sector. 16 Q. Let's go to page 12, if we can, and if we could look at 17 the bottom half of the page there is a section that's 18 highlighted there, as an example of evidence. It says 19 there: 20 "A major project involving a number of public sector 21 organisations did not establish a single, consolidated 22 business case until late into development. Although 23 benefits had been identified, they had not been 24 validated against the joint agreement of the total 25 change envisaged. When problems arose, therefore, their 125 1 impact on the projected benefits could not be tracked 2 against the original change planned, and those benefits 3 were quickly eroded." 4 That, I think, is an example of Horizon that you're 5 citing there? 6 A. Yes. I can't remember if it's specifically Horizon, but 7 it certainly fits the -- Horizon's MO in terms of the 8 project going forward. 9 Q. Thank you. You don't need to turn to it, but it's on 10 page -- electronic page 133 or internal page 106. It 11 refers to number 8, joint venture between the Benefits 12 Agency and Post Office Counters Limited and, in this 13 particular example it has a footnote 8, so perhaps that 14 is that example. 15 A. Mm yeah. If -- do you want me to look at it? 16 Q. No, not at all. Can you tell us how this particular 17 problem, that's identified there, manifested itself in 18 relation to Horizon? 19 A. Sorry, can you repeat that again? 20 Q. Absolutely. You've highlighted a problem there in that 21 box on page 12. How did this display itself in the 22 Horizon project? 23 A. Right, I'm trying to -- 24 Q. Please do feel free to spend a moment having a look at 25 that particular example. 126 1 A. And that's in my report? 2 Q. Well, it's page 12, and if you look below 1.14 there is 3 a box. 4 A. Yes. That's right. I apologise. 5 Q. That's absolutely fine. 6 A. Yes. This here would fit very snugly in the shoes of 7 the project they're undertaking to talk about. The 8 problems that advisers would encapsulate here is that 9 the joint agreement of the total change envisaged never 10 was, in fact, a compatible vision in the sense that the 11 visions that the partners had, the business partners 12 had, from the prospect of British -- sorry, the 13 Benefits Agency and POCL were entirely different. POCL 14 wanted to be able to maintain a paper-based system to 15 a position that they could realise at a later date 16 a technological fix to ensure that, going forward, they 17 could enter the IT Age with a business which was fit for 18 purpose. 19 Q. The lack of a single consolidated business case that's 20 referred to there, whose responsibility, in your view, 21 was that? 22 A. Well, that should have been at the outset, when 23 procurement -- at the point of procurement, there should 24 have been an agreed management programme and a senior 25 reporting officer. In a case like this, a very senior 127 1 person identified and agreed to draw up the programme 2 we're talking about, and this didn't happen. So you 3 ended up with, on the side lines, the Treasury, 4 increasingly having to pay bills, and then you've got 5 the Benefits Agency/DSS, the DTI/Post Office or POCL, 6 and of course, on the other side, you've got the company 7 itself, who saw a huge advantage in creating a structure 8 that could be sold on to other businesses worldwide, and 9 if they could get it to the position they wanted it to, 10 would be very beneficial to them going forward as 11 a business. 12 Q. Thank you very much. Can we turn to page 15, please, 13 and this is another example in respect of something that 14 went wrong. It's in the section 2 which is entitled 15 "Leadership and Responsibility" and if we look at that 16 example halfway down the page there. There's -- 17 A. Page? 18 Q. Page 15. 19 A. Right, okay, I'm going backwards here. 20 Q. That's absolutely fine. Please do take your time, we 21 have plenty of time this afternoon. 22 A. Right. Page 15? 23 Q. Yes. If on the screen we could scroll down, thank you 24 very much. It's the first example under "Evidence" 25 there. I'll read that for the record. It says: 128 1 "A very large project central to the business of 2 number of public sector organisations, and justified on 3 the basis of a shared business case, did not establish 4 single ownership of the business case and project until 5 two years after contract signing. By this time, much of 6 the original value of the business case had been eroded. 7 The lack of a single point with overall responsible for 8 the project caused difficulties from the beginning, as 9 the different organisations had varying degrees of 10 commitment to the project objectives. This became more 11 apparent as the project progressed and the benefits 12 eroded. Conflict management, prioritisation and 13 resolution processes were also adversely affected." 14 Again, insofar as you're able to, can you expand 15 upon that in relation to the Horizon project? Because 16 the footnote there, footnote 11, again refers back to 17 the Horizon project. 18 A. Yes. Again, this is evidence that they'd foot the bill 19 in terms of Horizon. You've got an agreement two years 20 late, but it's not an agreement in the way in which the 21 rest of that paragraph suggests, in that once they had 22 an agreement, it was only to have the project done. 23 There was no shared business case, in reality, in terms 24 of the -- at the end of this programme, what will be 25 achieved? What were the goals? What would be achieved? 129 1 Is it workable, and when will it work, and the cost of 2 it, and whether the financial cost will be able to be 3 scaled to a point where the project will be financially 4 viable? 5 And so, of course, you've got BA signing up to get 6 to ACT very quickly, POCL signs up to -- not to get to 7 ACT very quickly but provide a platform for them to be 8 able to at least dabble in the IT services area and, of 9 course, the organisation themselves, who had a long-term 10 strategy for the development of ICL and Fujitsu into 11 a company of international importance for the business 12 going forward, and being able to provide a product or 13 products which were seen to be products that would work, 14 in circumstances like the Post Office and other 15 organisations like the Post Office, with a significantly 16 large footfall in the market of consumers. 17 Q. Thank you very much. One of the things that the Chair 18 will have to consider in due course is recommendations 19 for the future. As somebody who wrote this report, who 20 did you have been in mind as acting as the single point 21 of contact with overall responsibility in a project like 22 Horizon? 23 A. Well, there would have to have been an RO it's so 24 important that there is a person of knowledge, skills, 25 workplace skills, skills in relation to understanding 130 1 the project management and identifying the targets that 2 were required to be done and how the project is managed 3 and run. 4 Q. Is that somebody in government, outside government? 5 A. It should be a senior responsible officer who can be in 6 government. I would have said at this time, when this 7 was published, you'd be very hard pushed to find anybody 8 in government of that that seniority and skill to take 9 on a task like this, and that's not a criticism of some 10 of the people that got landed some of this work. It's 11 an expanding area of expertise and knowledge, which was 12 not part of the public sector going forward, looking at 13 workplace development, workplace training and education. 14 Nothing in terms of the labour market, knowledge of -- 15 to be able to recruit and retain and pay responsibly the 16 type of people that were needed. And, therefore, most 17 of the skill and knowledge lay in the private sector 18 making bids. 19 But that didn't mean that the private sector was 20 also covered. There was a huge underpinning of the 21 skill base required for this emerging part of the world 22 economy -- never mind ours -- and I'm still sure today 23 we've not got on top of that but maybe somebody else who 24 is more knowledgeable than I am now at this point can 25 disagree with that, but it seems to me that it was 131 1 a huge accident waiting to happen. 2 Q. One final example is on page 44, if I could take you to 3 the bottom of page 44. I thank you. I'll read that 4 out. It says: 5 "When examined during the course of this study, four 6 central government projects, involving three 7 departments, were shown to have solutions being 8 developed that would not deliver the business benefits 9 anticipated at the outset. In each case, had the 10 suppliers' plans been examined and measured against the 11 required business benefits at stages throughout the 12 procurement lifecycle, the emergence of a significant 13 gap would have been exposed." 14 So is that saying that there needs to be greater 15 examination and measurement throughout the project? 16 A. Oh, without a shadow of a doubt. You're absolutely 17 right in that comment. But it's a bit more than that. 18 It only works throughout, if you know what -- before you 19 start, what is your programme of work, and what will be 20 the choices you make in respect of being able to ensure 21 that suppliers' plans are robust, are transparent and 22 clearly capable of carrying out the contract that you're 23 signed up and giving to them. 24 And that was not always the case. Because of a lack 25 of skills, again, you took -- not for granted, but you 132 1 took on trust what they were saying. And this goes back 2 to an earlier point of myself that they put their A team 3 up and then give the public sector their B or sometimes 4 their C team to carry the project out. And that's when 5 you get purely exposed in the gap between what you 6 expect in outcome at the outset, and what's delivered 7 isn't at all like what you expected. 8 Q. We will probably come to it in due course, but just 9 pausing there, then, is that what you experienced with 10 the Horizon System? 11 A. Well, that's part of the experience, yes. But the -- 12 Q. That refers to a few different examples -- 13 A. Yeah, but it was also not just due to this type of 14 evidence. It was also still due to the fact that the 15 Departments involved in Horizon had different endgames 16 envisaged, and you could say that ICL was left to weave 17 a way through the middle of the two of them. 18 Q. So did you feel that you were being given the B or 19 C team by ICL or was the problem more about ICL having 20 to navigate the Different departments or both? 21 A. I think it was part of both. And I don't want to be 22 unfair to ICL in respect of the skills that these people 23 were in place, where I arrived at, anyway, into post, 24 but the reality of the delay and when they started 25 initial discussions about how do we get out of this 133 1 delay, some of the -- by the time some of this would 2 come forward, it would have been nearly 10 years, and 3 still not a computer in a Post Office Counter anywhere. 4 And so it seemed to indicate to me that, at the very 5 highest levels of the project, the people senior on the 6 project themselves either had failed completely in 7 carrying out instructions, but more importantly, they 8 would probably have argued -- they would argue that much 9 of the job became overcomplicated because the Government 10 Departments hadn't done sufficient work themselves in 11 relation to their own solutions. And every time 12 a mistake or a difference of opinion came up in 13 something, it was further cost, further time -- time 14 restraints, until another solution was found to go and 15 help develop the programme. I don't know if that's 16 helpful or too long winded. 17 Q. Thank you very much. In that example there, you've 18 referred to -- I think there were a few different 19 examples. One of them is Horizon. Another was the 20 National Insurance Recording System or NIRS2. I don't 21 know -- you haven't been asked about this in your 22 witness statement. I don't know if you remember it. 23 But -- 24 A. I'll tell you how I remember it. It's not because of 25 the shambles. It was when I became a Minister for 134 1 Pensions in the DWP with Alistair Darling -- it just 2 shows you how the roundabout goes round -- and I started 3 getting letters and complaints from the public, and it 4 was only then when I asked "What's all this about and 5 why the delays?" and it was then they told me about the 6 falling over of the system. I think when it was 7 switched on it fell over. And it was a number of 8 years -- in fact, they were still, I think, at it when 9 I left the Department in 2003, were still working on 10 getting back the material that was lost, or trying to 11 find it and, as a consequence to that, they were taking 12 years and years and god knows the cost to get the system 13 online and working effectively, and all the material 14 records and stuff that should be on it were on it. 15 Q. We heard from Lord Darling, he had raised NIRS2 in 16 a letter, warning about what not to do in terms of 17 rushing things out without proper testing. Is that 18 something that you remember at all? 19 A. Proper testing of NIRS? 20 Q. Yes. 21 A. Yes, I can't remember the letter but I'm not surprised, 22 and I can be fair to Alistair Darling, he never spoke to 23 me about it. We worked very closely. And so 24 I apologise, but I've got no recollection of the letter. 25 It's quite -- 135 1 Q. No, not so much the letter, but were you aware during 2 your involvement in Horizon of concerns from, for 3 example, Lord Darling, about previous IT projects that 4 had suffered problems because of a lack of adequate 5 testing? 6 A. No. 7 Q. No. 8 A. Absolutely not. 9 Q. I'm going to move on to the running of the Post Office, 10 and can we look at your witness statement at 11 WITN03370100. Thank you very much. Can we look at 12 paragraph 21, that's page 8. 13 A. Thank you. 14 Q. Thank you. It's on screen, if you'd like to see it on 15 screen -- 16 A. I've got it there. 17 Q. -- and I'll also read you the passage. It says: 18 "From my perspective, as the Minister with 19 responsibility for the Post Office, my role was to 20 represent the points of view and problems faced by 21 [subpostmasters] and POCL. The latter was a public body 22 that, in my view, could and should have been doing 23 better -- a business of its size and complexity should 24 have a more detailed forward plan about how to modernise 25 and bring into the business technology which was already 136 1 in existence in one form or another in post offices 2 around the world." 3 Can you expand upon that, please, and tell us why 4 you reached that conclusion about the Post Office? 5 A. In general terms, in answering that, I very quickly had 6 concerns about the whole breadth of Royal Mail, 7 including, of course, POCL. All three businesses faced 8 significantly large issues in terms of market, in terms 9 of technology, skills and a lack of opportunity to 10 expand their markets in a way that they hadn't or hadn't 11 been allowed to over a long period of time. 12 For example -- I'll come to POCL in a minute. For 13 example, the Royal Mail and its industrial relations 14 problems have led to the situation of a lack of a lot of 15 progress in terms of the introduction of new 16 technological equipment to improve their operation and 17 the delivery of the post that they received. 18 The problem with their delivery distribution 19 group -- there were some when we came into power in '97 20 in the Treasury who wanted an immediate privatisation of 21 this section of the Post Office, because it lacked 22 capital investment and was underperforming in a growing 23 market in terms of logistics. I wanted the company to 24 consider seriously becoming not just a postal 25 distribution parcel company -- Parcelforce, I'm talking 137 1 about -- but I wanted it to be a logistical company 2 which wasn't taking a van load up to Scotland with 3 parcels and coming back empty. It really needed to be 4 better run and provide, with capital investment, the 5 appropriate vehicles and stuff, and could have been 6 a big competitor, in my view, across the whole 7 distribution market, and not just parcels. 8 And, of course, POCL is the third area and this was 9 an area which -- I don't think they took a sense of 10 where the wind was blowing when IT -- and I don't blame 11 them, this is true of both public and private sectors 12 all over the place -- that how quickly IT would become 13 so important to not just the retention of the business 14 but, more importantly, how to expand it, and be able to 15 have a business which looked after the needs of citizens 16 who were going to be increasingly engaging in IT 17 purchasing and, through that, being able to, from the 18 Post Office point of view, being able to ensure that, 19 even if they go to a -- were going to use banking 20 services, they should take advantage of the then and 21 continuing -- even today, I noticed -- banks closing 22 huge numbers of branches and the only availability of 23 services previously in rural and some urban areas would 24 be a Post Office with an IT technology, delivering for 25 the banks, where they'd withdrawn their services. 138 1 Q. Sticking specifically with Post Office Counters Limited 2 what was your view of their leadership? 3 A. Ooh ... (The witness laughed) 4 Maybe unambitious, and I don't want to be unfair. 5 I mean, I find these people were hardworking and wanted 6 to do their best by people. But, I mean, the leadership 7 of it also stems from the board and the boards that 8 preceded them. And so there also lies, because of this, 9 because of governments prior to us coming in and 10 subsequent, the Post Office was sat upon and used as 11 a cash cow by the Treasury over 20 years or more, 12 I think, where when they were making profits, a lot of 13 that was just profits which were taken by the Treasury 14 and recirculated. But none of it recirculated back to 15 the Post Office for investing in the future. 16 And so, being seen as a cash cow, suddenly because 17 of what's happening with new technology, it's no longer 18 a cash cow. It's going to be having cash given to it in 19 huge amounts over a long period of time. And so I do 20 think that this affected the management and their 21 attitude that, even if they'd brought forward new ideas, 22 it would depend upon the political decision by 23 government ministers. 24 Q. Was it in some way easier for them to sit on the cash 25 cow than spend time developing new IT projects? 139 1 A. I've got no evidence in the sense of a paper I could 2 show you, but I think there was a great deal of 3 disincentive because if you thought about it for 4 a moment, if your business -- you're working through 5 a huge customer base and at the end of each year, in the 6 main -- not every year, but in the main -- significant 7 sums of profit are made, and that profit then, before 8 you can even discuss it, is transferred -- has to be 9 transferred out to the Treasury. You have to say to 10 yourself "Well, what benefit have" -- I don't mean me 11 personally, them personally -- the business that they're 12 working for, and the business that they support. 13 I found that people that worked for the Post Office 14 are very loyal to the Post Office. At every level I've 15 found that. And so the disincentive wasn't the 16 caring -- if there was a disincentive, I think it was 17 out of the way in which central government dealt with 18 the Post Office over a long period of time. 19 Q. Sir Adrian Montague's evidence was that the Post Office 20 had failed to develop a comprehensive and effective 21 approach towards managing the project. Would you agree 22 with that or would you disagree, or would you say 23 something slightly different? 24 A. No, that is a fair summarisation from the Treasury 25 spokesperson. 140 1 Q. I'm going to move on to the subject of technical 2 viability and reliability. I think you've heard the 3 evidence given by Mr Sibbick in relation to the Montague 4 report; is that -- 5 A. Can I say I was so pleased to see how well he was and 6 how sharp he still was, and I've a great deal of -- not 7 a soft spot, I'm not that kind of person, but I really 8 appreciated his work when I was a minister. 9 Q. By the sound of it, you had a lot of faith in the 10 information that he gave you that it was reliable? 11 A. Yeah, not only in terms of its honesty, but also the 12 transparency of why he was giving the advice to me in 13 the first place, and his capacity to take very difficult 14 issues, which he had dealt with for many years, if I can 15 put it that way, relationships with the Post Office, and 16 the Treasury, and was able to take me through it and 17 probably made me a better minister in dealing with it. 18 Q. I'm not going to spend a lot of time on the Montague 19 report because we have seen it and we know what it says, 20 but I'll just take you to the executive summary. It's 21 POL00028094. 22 A. And that's what? 23 Q. If we can look at page 3, please, that's where the 24 executive summary is. 25 A. Right, okay. 141 1 Q. Now, I perhaps don't even need to ask you about anything 2 that's written there, because if you've heard the 3 evidence of Mr Sibbick, I want to pose a similar 4 question to you, which is: was your understanding that 5 this report was saying that Horizon was robust and 6 reliable or that it was a viable or feasible system, or 7 something else? 8 A. Yes. It's what you mean by "robust", I think, is key 9 here. I think it was robust in the sense that, at the 10 point that he looked at it, there was either in place, 11 or there was going to be in place, a means of having 12 a business structure and plan to carry out the project 13 in a different way but bring a project to fruition from 14 where it was. And that was what he recommended. If you 15 said it was robust in terms of signing it off and 16 setting out a date to start the services in post 17 offices, I wouldn't say that at all. No way were we 18 anywhere near that. 19 Q. If we look at the second bullet point under "Findings", 20 it says: 21 "Our view is that the programme is technically 22 viable. There must be some risk around scalability and 23 robustness because the system has had to be tested at 24 the level of component parts", et cetera. 25 There are sections in this report that identify 142 1 problems that are identified. Was your understanding at 2 the time that you received this report that it was 3 signing off Horizon as robust? 4 A. I'd have to, in the sense of answering that, give you 5 a general view. You could interpret it that way but, 6 from my own point of view, with all the documents that 7 are coming across my desk on this and discussions I've 8 had, and from various relationships involved in the 9 project, I wouldn't have been -- I wouldn't have enough 10 information or proof, as it were, enough history to say 11 that all the component parts tested -- all fitted 12 together and were well managed through the system. And 13 I think the papers that you follow on over the months 14 proved that to be the case, in terms of -- I don't mean 15 supporting my theory. I don't mean that at all. 16 I mean, I think it proved the case just how much 17 work had to be carried out following this report and, 18 indeed, how close it came to collapsing. 19 Q. Thank you very much. I get the sense that you followed 20 quite a lot of the evidence of Mr Sibbick and others, 21 and that I don't need to take you to those consequent 22 reports and matters such as that. I'll very briefly 23 take you just to a November 1998 document, so it's 24 BEIS0000103. I think it's your D2, if that helps. I'm 25 only going to look at it very briefly, because this is 143 1 shortly after. So the Montague report was July 1998. 2 I'm going to look at page 15 of this November 1998 3 document and it's paragraph 6, on page 15. 4 A. Have I got the right document, B? 5 Q. D2. Sorry, D. 6 A. D2? 7 Q. Yes. 8 A. Right, the document I've got in D2 is "BA/POCL 9 Automation". 10 Q. Absolutely, yes. That's a progress report and it has 11 your name in the top right-hand corner on the first page 12 or your private secretary slash your name. 13 A. That's page 6? 14 Q. Yes. Sorry, page 15. Internal page 14, but it's our 15 page 15. The detail of this report doesn't really 16 matter, and I'm just going to read you a very short 17 passage. 18 A. Apologies for the -- on page 15, mine is "Comments on 19 funding proposal", and it's got -- 20 Q. It's the page before that. 21 A. The page before that -- 22 Q. Yes. 23 A. -- hasn't got -- 24 Q. It should have something that says, "Acceptance" there, 25 number 6? 144 1 A. Yes, apologies. I've got that now. 2 Q. I'll very briefly just read that one paragraph there. 3 It says: 4 "ICL Pathway's proposals on Acceptance would mean 5 that the Contracting Authorities would be locked into 6 the system before it has been fully tried and tested. 7 BA and POCL have already made a very significant 8 concession on Acceptance as part of the Corbett 9 proposal, ie in waiving their termination rights at 10 Acceptance of NR2, which has not delivered the full 11 contracted requirements. Both parties are not willing 12 to bring forward acceptance before the end of the Live 13 Trial. Both parties are prepared to consider a modest 14 increase in the number of allowable faults but not in 15 the magnitude being proposed by ICL." 16 Do you recall, in the winter of 1998, movement away 17 from trials with regards to ICL's negotiating position, 18 that they wanted to have less testing of the system, 19 effectively? 20 A. Yes, indeed, and it was one of the issues that the group 21 that I established via the Secretary of State, Stephen 22 Byers, of the staff unions, the postmasters, and other 23 key people, as one of the things that I wanted us to do 24 was to be able to monitor and monitor effectively the 25 trials and the quality of the trials. And, despite the 145 1 need for us to get to a point of where we established, 2 as soon as we can, the programme in terms of rollout, it 3 shouldn't be rolled out at the expense of quality and 4 transparency of the trials. 5 Q. Yes. Absolutely. We'll get to the Working Group 6 shortly, but just sticking it in the winter of 1998, I'm 7 going to take you to a document that you will, again, 8 already have seen. It's BEIS0000418. This is a month 9 after that update that we just saw, and this is the 10 letter from Peter Mandelson to Stephen Byers. 11 Now, at this time, December 1998, we've heard quite 12 a lot of evidence of a real divide within the Government 13 Departments about the future of the project. The 14 picture that is painted in this letter is quite stark, 15 from the Secretary of State for Trade and Industry. If 16 we look lower down the page, please, the final 17 paragraph, Lord Mandelson saw two options: continuation 18 or, in the words that he's used on that second bullet 19 point: 20 "or we can take a major step into the unknown, 21 delaying the modernisation of the Post Office Counters 22 network, risking the departure of existing clients and 23 virtually eliminating the possibility of attracting new 24 ones." 25 It's in this letter, having painted the stark 146 1 picture that, if we go over the page, he uses the 2 following words. He says: 3 "There is still some way to go to complete the 4 Horizon project, but the basic development work has been 5 thoroughly evaluated by independent experts who have 6 pronounced it viable, robust and of a design which 7 should accommodate future technological developments." 8 Did you understand, at that stage, that Horizon was 9 robust, or was that putting a gloss on how things were, 10 or something else? 11 A. No, I don't think that -- despite his reputation, 12 I don't think that's what Peter Mandelson was doing. 13 When he became the Secretary of State, from my 14 knowledge, he was very hands on with this with me and 15 engaged with us, and he had a really strong view of the 16 Government and the development of Government Departments 17 and businesses, and so he did have a knowledge of it. 18 He may well, of course, have been given further 19 briefings which he would have told me about, and so 20 I think this would be his honest view of the information 21 that he'd had. This may have been because they'd worked 22 hard over the previous weeks and they'd seen other 23 papers, where the situation looks hopeless, and once 24 heads were knocked together they made quick progress on 25 matters between them. So this may well be one of those 147 1 which he'd be happy with. 2 Q. If that was reference to the Montague report, would it 3 be correct? 4 A. Well, I don't know that I can comment that, in the sense 5 that is it the exact same information as he got from -- 6 that Montague got or is it a subsequent look at the 7 situation and evaluating it? I notice there are 8 independent experts. I'm assuming that -- I'm not sure 9 if that's CA or -- 10 Q. Sorry, we've just had a fire alarm. We may need to 11 break. 12 Sir, perhaps this is a good time to take our 13 mid-afternoon break. 14 SIR WYN WILLIAMS: Yes, that seems fine to me, Mr Blake. 15 MR BLAKE: We're probably meant to rushing about a lot more. 16 SIR WYN WILLIAMS: Let's have a break, in any event, for 17 ten minutes and if it's going to be any longer, you let 18 me know. 19 MR BLAKE: Thank you very much. 20 THE WITNESS: Thank you. 21 (2.59 pm) 22 (A short break) 23 (3.18 pm) 24 MR BLAKE: Thank you very much, sir. It turns out there 25 wasn't a fire. Thank you. 148 1 Sir Ian, we were just looking at document before the 2 break, from Peter Mandelson, where it states that: 3 "Independent experts have pronounced it as viable, 4 robust, and of a design which should accommodate future 5 technological developments." 6 We're interest in knowing where the term "robust" 7 comes from, or if it's used in the same way by 8 Government as it was later by others. Was that term 9 used, to your recollection, within your department, as 10 shorthand for the state of Horizon? 11 A. Yes. I think that would be a fair point to make. 12 That's why I said in a previous answer that the 13 interpretation of "robust" -- I didn't say it in this 14 way, but "robust" is quite a stretchable phrase. And in 15 that respect, I'm absolutely sure you've got -- you've 16 now got a "robust" from the then Secretary of State, 17 a "robust" from the Treasury spokesperson. And as 18 a consequence of that, we were in a situation where 19 I suspect that we were now going to try and move on to 20 see if -- with the situation, as explained by both of 21 them, that we could try and take things forward to 22 proceed with the project. And that, I would advise 23 ministers at the DTI -- which includes myself -- were 24 probably very concerned that the package could still -- 25 is still -- be withdrawn, that the programme would be 149 1 withdrawn, and the consequences for that would be very 2 difficult indeed. And, obviously, very robust in 3 negative terms. 4 Q. So in this period, is there a degree of trying to sell 5 Horizon to the rest of Government on behalf of the 6 Department for Trade and Industry? 7 A. I would say that there was obviously advocacy involved, 8 and their advocacy's involved because of the commitments 9 in the manifesto, and other things about the future of 10 the Post Office, and the Post Office's Network that POCL 11 were responsible for. 12 And in that situation I would find it very difficult 13 indeed for the Government -- indeed, not only difficult, 14 in many areas impossible, having given that 15 commitment -- quite freely and openly committed 16 ourselves to the network -- that unless we had, going 17 forward, a business plan and a technological plan, then 18 that commitment could never -- could never have 19 survived. 20 The closure programme would have intensified. The 21 customer base would be eroded extremely quickly, in my 22 view, and the consequences for that for the Post Office 23 Counters and the Government's veracity in its claim in 24 its manifesto would be -- well, it would be knocked out 25 completely. 150 1 Q. So would it be fair to say that by then, by 2 December 1998, as far as the Department for Trade and 3 Industry were concerned, abandonment was out of the 4 question? 5 A. Yeah, I would say abandonment was out of the question, 6 but it was a bit like -- I felt like a poker player 7 where I got showed three hands and none of them would 8 win a game. And so you had to then think: what was the 9 best one? What was the best chance you have in getting 10 across what we wanted to do, in the end, and find a way 11 of doing it to ensure that we did get a new 12 technological platform, going forward, for the Post 13 Office that the Benefits Agency got what they were 14 committed to during the election: an electronic safe 15 system for delivery of benefits, and the savings from 16 that being able to be regenerated? And I would imagine 17 we were, at the time, saying anti-poverty measures. 18 And so there was, I think, a necessity to -- not to 19 forget those commitments. 20 Q. Can we look at CBO00100001_072, please. 21 A. What's that? 22 Q. You don't need to turn to that. It'll be brought on to 23 screen, and it's a document that we won't go to any 24 detail in, but it's one that you will probably have seen 25 through other witnesses. 151 1 A. Yeah. 2 Q. It's the note from Geoff Mulgan to the Prime Minister, 3 and it's page 4, paragraph 8, where the message to the 4 Prime Minister is -- and it's the last few words of that 5 paragraph -- I'll read that paragraph. It says: 6 "At first glance, most of the factors point towards 7 continuation. However my view, which Lord Falconer 8 shares, is that although short-term considerations and 9 expedience point strongly towards making a deal, this 10 will in the long run prove unsatisfactory, leaving the 11 Post Office and Government dependent on a hugely 12 expensive, inflexible, inappropriate and possibly 13 unreliable system." 14 Then over the page we have the handwriting of the 15 Prime Minister at the bottom. And again, there's 16 a reference there to the system itself being flawed. 17 And my question for you arising from that document 18 is simply that we don't see those kinds of concerns 19 about reliability being displayed in documents coming 20 out of the Department for Trade and Industry at that 21 time. Is that something that you agree with? 22 A. No, can we just go back? Geoff Mulgan has written that, 23 and to my knowledge, at the time he was writing it -- 24 and he's a very good advisor, or was -- never spoke to 25 any of us. I mean, that's a personal opinion that he 152 1 has personally expressed, and he's done it in a way he's 2 picked out items from various sources and put together 3 an argument for the Prime Minister. I mean, it's not 4 unusual from a special advisor to put an argument in 5 that way. 6 The interesting thing -- although the Prime 7 Minister's note -- the Prime Minister didn't waiver from 8 the need to continue the project. The Prime Minister 9 was secure in the view that the project had to be found 10 a way of working, and even put forward, I think at some 11 point, suggestions on how to do that. So interesting as 12 it was, Geoff Mulgan's -- I will just it's a note in 13 history, and I think the project has lasted longer than 14 he did. 15 Q. Do you not think that, at the same time, the Department 16 for Trade and Industry were doing the same thing in not 17 highlighting flaws with the system? 18 A. No. I mean, I can only say, as a minister, I'm given 19 information that I knew that I would be nothing other 20 than transparent and honest, even if it upset people, 21 and even if it was -- transparency made it more 22 difficult for me to put a case. I saw no benefit 23 whatsoever, given that I was arguing for a transparent 24 system from the beginning, not to be transparent. 25 Alongside of that, I had a duty -- and this is 153 1 transparent as well -- to put across the consequences. 2 Because in the end, I'm not an official; I'm 3 a politician. And my political brief, given to me by 4 the Prime Minister, was to ensure we implemented what 5 we'd said about the Post Office. The fact that I knew 6 nothing of ICL until I came to Government, that just 7 happens. That's, for a politician, another day in the 8 office to sort out -- that the situation is different to 9 what you first envisaged. But I had a duty of care to 10 the Government in that sense, but it's not a duty of 11 care to mislead or misrepresent. It's a transparent 12 responsibility that I would be carrying out. 13 Q. Absolutely. If we put allegations of misleading totally 14 to one side, I think the suggestion might be that the 15 Department for Trade and Industry weren't looking to 16 where they should have been, in terms of the technical 17 robustness of the system. They weren't carrying out 18 those kinds of investigations because they were so 19 headstrong that they wanted the system. Is that 20 something that you would agree with? 21 A. I'll take you back to it, and the McCartney report 22 highlighted it in spades. And to be fair to Mr Sibbick, 23 yesterday, he made the point. He wasn't technically 24 engaged or trained to do this. His training and skills 25 were at a different level, and the level of his skills 154 1 were for me, as a minister, were extremely helpful. 2 Very helpful and sensible and pragmatic. 3 The point is that DTI, POCL, BA, DSS didn't have the 4 sufficient number of technical experts. Indeed, if they 5 had any at DTI, I'd like to know who they were. 6 Q. Absolutely. I could take you to some more ministerial 7 submissions, but perhaps I don't need to because there 8 are submissions throughout December and later in the 9 year that are pleading the case for Horizon, but that 10 aren't dwelling on technical matters. And is it your 11 evidence that that's because they simply didn't have the 12 technical expertise to look into those kinds of things? 13 A. That's partly true, yes. But remember, they've got the 14 political pressure of a White Paper coming down the 15 track. You've got opinions asking -- and quite rightly, 16 postmasters -- about the situation, and when are we 17 going to come -- somebody come up with a proposal that 18 looks like it's going to be doable and be effective? 19 And the objectives that were set right at the outset 20 for this project, and therefore you will see, and in 21 some places you may see in the paperwork, I got the 22 impression of it being not a mêlée as such, but a huge 23 amount of activity on the political front of people 24 putting their points. But the points are put in a way 25 that it leaves a door open for some other kind of 155 1 discussion. And in the end, reading the documents, 2 I must admit, I was getting confused at some time as to 3 which option we were looking at. We were getting 4 options flying around the room with option A, option B0, 5 option 2, option 3. Then out of the blue, another 6 option comes up: A2, with Lord Falconer's name on it. I 7 never actually seen that one, so I don't know what it 8 said. 9 And just reading the documents, it does look like 10 a maelstrom of activity, where people in favour of the 11 project were putting as much effort as they could into 12 it, intellectually and politically, to try and establish 13 something with the time clock going closer and closer 14 towards a collapse in the project. 15 Q. Would it be fair to say that the Department for Trade 16 and Industry wanted to shut the door on further 17 discussions so they could get on with the project? 18 A. No, that would never have happened under the Secretary 19 of State that we had, and I wouldn't advise that. And 20 you'll see in the documentation the importance that we 21 laid on getting agreement, and we would help facilitate 22 those agreements. And those agreements could be quite 23 complex. You get POCL and their arrangements with ICL, 24 then you've got BA and POCL, and then BA and ICL. And 25 this kind of pyramid sometimes felt it was sitting 156 1 upside down. It wasn't something -- it was other than 2 shaky, at best. 3 And so it was important that whatever, in the end, 4 we came up with, it was doable. It was transparently 5 so. I know I keep using this word "transparent", but 6 it's so important in public life. And that the finances 7 were available on an agreed basis to take the project 8 forward, and the design work, the engineering work, the 9 strategic work around it, building the project to the 10 ability to go live, it was critically important that all 11 that was agreed, and there was a signed agreement in the 12 end. 13 And there was a date in April sometime, I think. It 14 was critical, because Fujitsu's board were meeting in 15 April. I only say April -- I think it was around about 16 either my birthday, the 25th, or my granddaughter's, the 17 23rd. 18 Q. We'll get to April shortly. 19 A. I'm not saying that to get a card off you, by the way. 20 That was the kind of timescale that we were potentially 21 having to work to. 22 Q. Sticking with the winter of 1998 -- and I will move on 23 from this period shortly -- as you've fairly described, 24 there were lots of discussions at a political level. 25 I've mentioned before, in November, discussions about 157 1 testing. I'm going to look at a document from December, 2 14 December, that also talks about testing. That is 3 BEIS0000400, please. It's a letter from yourself to 4 Stephen Byers. If you want the hard copy, it's D98, but 5 again, I don't think you necessarily need to turn to it 6 in hard copy, because it's one paragraph that you may 7 have seen from others' evidence. 8 It's a letter from yourself, as I say, to Stephen 9 Byers. And if we go over the page, there is there 10 a discussion about -- it is a dispute that has taken 11 place with Alistair Darling, and it's about acceptance 12 testing. It says there: 13 "Third, acceptance testing. Alistair states that 14 'ICL persist in asking for acceptance on the basis of 15 a laboratory test of the system as opposed to a live 16 trial ...'. We agree with him that it is a hugely 17 important point. It would be unthinkable to sign off 18 acceptance of the system until it has been shown 19 convincingly to work on a reasonable scale in a live 20 environment. But Alistair is we believe mistaken. ICL 21 are asking no such thing. The company have moved 22 substantially from their 9 November position and we have 23 now conceded that acceptance will follow live trials 24 based on the NIRS2 software released at 300 offices. 25 More specifically, there are 24 separate components of 158 1 the acceptance test procedure. Some do indeed involve 2 elements of bench and/or model office testing, but all 3 also include live trial in 300 offices." 4 When Lord Darling gave his evidence, he expressed 5 some concerns that he had concern at the time about the 6 size of those trials, only in 300 offices, when it was 7 going to have such a significant project throughout the 8 country, when it was finally rolled out. Do you recall 9 those discussions about testing at that stage? 10 A. Not in detail, no, but having said that, when 11 I established the panel that I've set up, the point 12 I made, both in writing and in person, was that I'd like 13 to see us, as a group, press for large-scale live 14 trials. That, I think, is the word I used: a large -- 15 a large scale. And this is the group that was 16 established by me with the appropriate representations 17 of the unions, postmasters, postmistresses, and other 18 key people. 19 Q. Absolutely. We will get to that very shortly. But just 20 in terms of testing, do you remember a continued theme 21 throughout this period and onwards was ICL not wanting 22 to carry out further model office testing that the 23 Department for Social Security wanted at that stage? Do 24 you remember that discussion at all? 25 A. No, but I wouldn't be surprised, because there were 159 1 quite a few occasions through the whole saga. You had 2 to really push ICL to do what's been requested by each 3 customer. 4 Q. Can we -- 5 A. It goes right back to the early discussion about the 6 lack of senior responsible officers -- officer, and 7 a development programme, and a programme alongside of 8 that in terms of implementation. And if we had that in 9 place, it shouldn't have required to get letters from 10 Alistair or from me, interpreting information from the 11 frontline from people who may have an interest in the 12 frontline as to its outcome. And so that's not an 13 excuse; it's an absolute fact. This just shows you the 14 difficulties when you've not got in place the 15 recommendations that are in the McCartney report. So 16 I'm trying to make it a bestseller. 17 Q. Absolutely. So you have the lack of a single point of 18 contact, and I think you've also expressed concerns 19 about a lack of expertise on the Civil Service side. 20 A. Mm. 21 Q. And perhaps we can go to your witness statement. That's 22 WITN03370100. And we'll start at page 12, paragraph 29. 23 So this is talking about 1998, and you say: 24 "At the time, technical knowledge and understanding 25 of computer systems in Government was extremely poor. 160 1 Few people had the knowledge and understanding of 2 procuring and developing systems such as Horizon, and so 3 the civil servants managing the project did not always 4 have the appropriate level of understanding to identify 5 or raise issues." 6 If I could look at another paragraph, it's 7 paragraph 29. Sorry, paragraph 69, page 29. Sorry, 8 page 30, over the page. Paragraph 72. So it's at the 9 bottom of page 30. It says: 10 "At the time, promotions within the Civil Service 11 were based on years of service. So you had people who 12 didn't know how to turn on a computer leading on IT 13 issues, and we were getting taken to the cleaners in 14 negotiations with software companies." 15 A. Yeah. 16 Q. Now, at this stage you had the Montague report 17 addressing technical viability, as we've discussed, 18 a very early stage snapshot. You have ICL moving, or 19 trying to move away from certain types of testing. Am 20 I right in saying that at this stage, so late the 1998 21 into 1999, there was no further significant Government 22 commissioned analysis of the technical viability of 23 Horizon? 24 A. That would have been my understanding that was the case, 25 but that doesn't mean that was actually in practice. 161 1 I just don't remember anything like that coming across 2 my desk. 3 Q. The in-principle agreement was not until 24 May 1999. 4 A. Mm. 5 Q. Would it be fair to say that, to the best of your 6 recollection, there wasn't a significant, independent or 7 otherwise, report into the technical reliability and 8 robustness of Horizon? 9 A. Yeah, that could have -- in my view, looking back, as 10 I do, in terms of lessons learnt -- that should have 11 been a report alongside of the other report giving 12 absolute clarity of what had been done to secure the 13 objectives in the way that you describe, and that should 14 have been -- would have been signed off or should have 15 been signed off by a senior reporting officer. 16 And again, that's another sign of the lack of the 17 structure in terms of management. Management control. 18 Q. I'm coming now to the thing that I think you're very 19 keen to talk about, which is the Horizon Working Group 20 of 1999. Am I right in saying that you saw that as 21 a forum to raise those kinds of technical issues? 22 A. Yes, if people knew of them. The point, for me, was 23 that during all the discussions that I'd been involved 24 in as a minister, and meetings with other ministers and 25 colleagues, the one element which I thought was 162 1 inadequate, that was the engagement of people where the 2 technology would impact on, in terms of a business, or 3 in terms of as an employee, in terms of being a manager. 4 It was always discussions with people at the top, and 5 I wanted -- and I've got a view of life, still have, 6 that people's lived experience is as important as the 7 so-called professional experience that people are 8 claiming. And if I wanted a group set up, and suggested 9 the group to the Secretary of State, that this group 10 would be a door opening for people with skill, knowledge 11 and commitment, who, from their practical experience, 12 knew what was required on the ground, knew what they 13 wanted on the ground, and had the capacity to understand 14 whether or not the systems in place would be robust or 15 not, or that the system being put in place would be 16 sufficient to ensure that the business on the ground was 17 able to continue and flourish at a later date, in terms 18 of a development of other products. 19 And the other reason with the unions and the CWU, 20 the CWU, for many years, had had issues along the lines 21 of the introduction of technology, which I alluded to in 22 a previous answer. And it was therefore important to me 23 that their experiences, negative or otherwise, that it 24 was important that they felt part of being engaged in 25 making decisions about this very, very big, difficult, 163 1 complex, and in-trouble policy. 2 Q. Can we look at BEIS0000345, please. That's your D53, if 3 you need a hard copy. But again, I don't think -- we're 4 certainly not going to go into detail in this document. 5 It's a submission to you from David Sibbick of 6 7 June 1999. It addresses the initial meeting, the 7 first meeting of the Horizon Working Group. It's 8 a steering brief. And if we scroll down, we can see 9 those who attended. 10 Now, bearing in mind the time here is 7 June 1999, 11 detailed agreement between Post Office Counters Limited 12 and ICL wasn't reached until 28 July of 1999. So it 13 seems as though the Horizon Working Group was working in 14 parallel with discussions in respect of the detailed 15 agreement between the parties. Was that intentional? 16 A. Yes. I think it was. Certainly from my perspective, if 17 I could have got agreement, I'd have had the Horizon 18 Working Group in place before when we did do. But the 19 timing of it was down to the politics of it. I don't 20 mean partisan politics, I mean tension of politics of 21 where each of the main players were positioned in the 22 discussions that were taking place. And so the balanced 23 came to: let's get the group up and running now, and 24 then potentially get to the endgame, whatever that 25 endgame is. And so that's why we met, and this was the 164 1 first meeting. 2 Q. We see there the attendees included the Managing 3 Director of Post Office Counters Limited, and Mr Dave 4 Miller from Post Office Counters Limited, the CWU, the 5 Communication Managers Association, and the NFSP. 6 A. Yes. I think the Communication Managers Union is now 7 part of Unite the Union. 8 Q. And what did you envisage that the three different 9 associations there would bring to the table, in respect 10 of their various roles and responsibilities? 11 A. Okay, well, the Communication Workers Union were 12 involved in the mechanisation of the Royal Mail's 13 delivery collection, delivery services, and there had 14 been, over the years, some difficult discussions between 15 management and -- well, the company and the unions. 16 Obviously I was never involved in those, but I knew of 17 them because of my knowledge of the General Secretary, 18 Derek, and others before him. And therefore, it was 19 important to ensure that they felt they get, from their 20 perspective, a view of how IT should be introduced, and 21 how it should work, in terms of those engaged in making 22 sure it works. 23 And the Managers Association, which as I say was 24 a big part of Unite the Union, these are the managers on 25 the floor working with the CWU members. And as 165 1 management, of course, their duty is to put across the 2 view of the company itself on issues, as well as 3 expressing their own issues about it. And therefore it 4 was important that that level of management expertise 5 and knowledge got reflected in what was happening for 6 the endgame. 7 And then the subpostmasters -- I mean, that was 8 critically important. It's not just the fact that they 9 had 20,000 outlets; it was that most of them had 10 experience and years of knowledge of their customer 11 base, the operation of the facility, whether it was 12 a single Post Office or, like most of them, you know, 13 a shop which included the Post Office, and their 14 knowledge, in terms of what would be required for them 15 to be able to sustain their business. 16 Secondly, in retiring, as many people were doing -- 17 some of course obviously because they didn't want 18 technology, fair enough -- but lots of them were getting 19 to the age where retirement was a great option for them, 20 and as a consequence of that, procedures were in place, 21 in terms of payments to subpostmasters who were leaving. 22 And it was important, therefore, to them that the 23 business, when it went for sale, was viable, was 24 feasible. Because if it didn't, it would be just be 25 collapsing and nobody would buy it, and it would be 166 1 impossible for it to be bought. And so it was 2 critically important, that. 3 And also, of course, they'd sunk, as I understand 4 it, as I remember, approximately £1 billion of their own 5 money over the years in the business itself. And that 6 shouldn't be sniffed at, given that £0.5 billion had 7 already been spent and covered, and no equipment had 8 been put in the Post Office. And so I think that was 9 one of the important reasons why they got involved. 10 Now I always found that the General Secretary, like 11 any other General Secretary, puts the case for their 12 members, and advocates them. I always found him a man 13 who gave me it from the frontline, and didn't mix his 14 metaphors, and in a way in which I could fully 15 understand that what was happening on the frontline, as 16 far as postmasters were concerned. 17 Q. So there you're talking about Mr Baker? 18 A. Oh yes. 19 Q. Yes. In respect of the three of those organisations, 20 was there one in particular that stood out with regards 21 to what you imagined they would be able to help you 22 with, when it came to the technical side of Horizon, or 23 were they equal? 24 A. No, it wasn't a matter of being equal. They all gave 25 what they could to the discussions. And they were 167 1 coming from sometimes a potentially different expertise, 2 ie subpostmasters didn't work in the big sorting offices 3 that CWU members did. So CWU union members didn't run 4 sub post offices, but that was, in the rural areas in 5 particular, a base for postmen and postwomen to deliver. 6 And, of course, the Communication Managers Association, 7 it's now Unite the Union, their task was to implement 8 and ensure the smooth running of technology changes in 9 the Post Office, and therefore their knowledge, in terms 10 of not only what happened technically, but when actually 11 equipment was put in place, what was their response to 12 it in terms of staff, skill, knowledge, willingness, 13 et cetera? And so they also had a story to tell. 14 Q. Can we look at BEIS0000345, please. That's your D53. 15 Sorry, that's the same document, is it? 16 If we could go now to BEIS0000346, and that's your 17 D54. This includes the proposed terms of reference for 18 that group, and can we look at page 2 at the bottom, 19 please. You may have heard these being read to Mr Baker 20 this morning but I'll read them out again, just in case. 21 A. No, I didn't. 22 Q. Okay. So it says there: 23 "I see the work of the group as falling into three 24 main areas. First, there are the negotiations between 25 POCL and ICL, and between POCL and BA, that need to take 168 1 place over the next few weeks to put in place the 2 detailed contractual arrangements that will give effect 3 to the outline agreement reached on 24 May." 4 So that's as I said, that they had reached the 5 outline agreement and were still negotiating the 6 detailed agreement: 7 "I see a role for the working group in carefully 8 monitoring these negotiations and in addressing and 9 helping to resolve any sticking points that may be 10 encountered." 11 Over the page, please, thank you: 12 "The second area covers the remaining development of 13 phases of Horizon, including large scale live trials, 14 system acceptance, and rollout of the system smoothly 15 and in a timely fashion to all offices within the 16 network, followed by the migration from paper-based 17 methods of payment to ACT-based payments accessible at 18 post offices. I believe that the Working Group could 19 provide a valuable forum for bringing pressure to bear 20 where needed and for seeking solutions to any problems 21 that may arise." 22 Just pausing on that second one, can you give us 23 an example of what you had in mind when you said 24 "seeking solutions to any problems that may arise"? 25 A. Yes, well, as you will note, the -- in the whole of this 169 1 group of events, when you think you're getting a smooth 2 run at things, suddenly something out of your left side 3 arrives, and it's a showstopper. And, as we know, that 4 had been happening on a regular basis, and there were 5 still now at a point when this was going on, issues to 6 be resolved, and some of those issues still related to 7 the final look of the project, in terms of options. 8 And it was important that they brought some pressure 9 to bear from their experience and knowledge, in 10 particular subpostmasters, to -- being able to express 11 their views in what they would see as a way forward to 12 any of the problems that arise. And also, that put 13 pressure on me, and rightly so, to ensure that they were 14 aware of what problems had arisen and I had been 15 informed about. 16 Q. It says: 17 "The third area concerns the commercial exploitation 18 of the very considerable potential which the Horizon 19 platform will offer once in place. The combined 20 experience of the Working Group should prove a valuable 21 source of ideas and contacts for business opportunities 22 and future revenue streams." 23 So focusing on the second area, really. You've said 24 in your witness statement: 25 "I thought it was important that subpostmasters, via 170 1 the NFSP and trade unions, via the CWU and 2 Communications Managers Association, were engaged and 3 involved in the working group so that they could explain 4 what was actually happening on the ground." 5 Was that your intention? 6 A. Yes. Oh, yes. I mean, although I've got all my input 7 and sympathy is with the employees, unless I knew what 8 was going on, I wasn't prepared just simply to take the 9 views of people at a hugely elevated level of any of the 10 businesses, given that their line may well have been the 11 right line, but I also wanted to know on the ground what 12 were people feeling, what were they facing, and what was 13 their knowledge? How much information they were given 14 to ensure that their members had a sense of what was 15 going on and had a chance of putting a view if they 16 thought there was a view that needed to be put. 17 Q. Can we look at BEIS0000355, please. This is again, 18 another ministerial submission this time from David 19 Sibbick, 28 May. Can we look at that paragraph there. 20 It's your D62 but, again, I really don't think -- I'm 21 just going to read to you a few sentences. It says: 22 "The second issue is to ensure that the remaining 23 development phases of Horizon, including large scale 24 live trials are completed without further slippage; and 25 most crucially that the rollout of the system following 171 1 acceptance to all offices within the network is 2 accomplished in a smooth and timely fashion. The CWU 3 and NFSP members will be in the front line of the action 4 during these phases and both organisations have much to 5 contribute to the successful completion of these 6 phases." 7 Does that make the same point: that your vision for 8 the group would be that the CWU and NFSP being on the 9 frontline would be an important component of that group? 10 A. Yes, as was the National -- although it's not mentioned 11 in that paragraph, that would include the National 12 Federation, most assuredly. 13 Q. To make the point once more, let's look at NFSP00000064. 14 This is a letter from you to Colin Baker at the National 15 Federation of SubPostmasters, 7 June 1999, and this is 16 talking about the Horizon Working Group, and its aims 17 and objectives. It's the final paragraph on that page 18 that I'd very briefly like to take you to. It 19 outlines -- we talked about the three areas. This is 20 talking about the second area. It says: 21 "The second area covers the remaining development 22 areas of Horizon, including large scale live trials, 23 system acceptance, and rollout of the system smoothly 24 and in a timely fashion to all offices within the 25 network followed by the migration from paper-based 172 1 methods of benefit payment to ACT-based payments 2 accessible at post offices. I believe that the Working 3 Group could provide a valuable forum for bringing 4 pressure to bear where needed and for seeking solutions 5 to any problems that may arise." 6 That's the same point being made in a letter there 7 to Colin Baker of the NFSP. 8 A. Mm-hm, yes. 9 Q. You actually launched the working group at a CWU 10 conference. We can see that at BEIS0000357. 11 A. Yes. 12 Q. Do you remember this -- 13 A. Yes, I also -- at the same time, I informed them of the 14 purchase of the German postal service. I don't mean 15 their national post office. It was a group of 16 distributors in Germany of parcels, et cetera, and 17 having spoken to the chief executive, John Roberts, at 18 the time, it was a potentially important marketplace 19 which they would want to -- need to get into, given that 20 the German, French, Dutch and other parcel services and 21 post offices were becoming active in the British market. 22 Q. Thank you. So we're here now in May 1999. Your 23 evidence so far has been that there wasn't a significant 24 Government study or you're not aware of a technical 25 study between the Montague report and the summer of 173 1 1999, and also that Government civil servants weren't 2 that knowledgeable about technical matters. How 3 important did you see, at this time, these meetings to 4 be the forum to raise technical issues with Horizon? 5 A. I thought it was critical, and it was incumbent on me 6 and then, subsequently, I didn't last as chair very 7 long. I was out the door and on to the Cabinet Office. 8 I felt it was a duty of care towards people that this 9 system wasn't just a one-line press release. We've got 10 this group, I wanted it to be a working body recognised 11 by all concerned, treated with respect, and one that 12 views would be listened to and taken into account in 13 an effective way. 14 Q. Can we look at NFSP00000203. This is the note of the 15 first meeting on 22 June. Can we go over the page, 16 please. So this is the first meeting, 22 June. You're 17 there present, along with the Union, Association and 18 NFSP. Can we go over the page, please, to page 3 and 19 there are two paragraphs that I'd just like you to give 20 a little bit more detail about. In this top paragraph, 21 it says: 22 "There was a need to establish exactly what POCL was 23 buying. ICL have not allowed access to policy so that 24 they could determine this and have insisted that it is 25 not a contractual issue. They have however indicated 174 1 that they are willing to talk informally. POCL consider 2 the issue to be too important to the future commercial 3 prospects of the projects to rest on a purely informal 4 and unenforceable indication ..." 5 I apologise for just quickly taking you to one 6 paragraph, but are you able to assist us with that at 7 all? 8 A. That's a classic -- if you don't mind me saying -- 9 reason why we established the group because, unless we 10 had the group, it is absolutely certain that the key 11 people in the frontline would have no knowledge of this 12 difficulty. None whatsoever. Therefore this was 13 a matter for the group to consider and, from that, what 14 actions or recommendations they wanted to make, or 15 whether they just wanted to say "Well, you as ministers 16 get on with this. Sort this out and come back to us 17 with what you're proposing". 18 Q. I'm now going to read to you paragraph 6, and it's one 19 that you may have already seen. It says: 20 "Mr McCartney said that the rollout issue was 21 crucial; he was emphatically not prepared to accept 22 getting away from the commitment to 2001. Slippage 23 would make the wider discussions on government usage of 24 the network impossible. If there were problems with 25 software, training, etc, then these should have been 175 1 flagged up earlier, and must now be resolved in a way 2 that enabled the 2001 timetable to be recovered." 3 It seems to be your position expressed there that 4 software issues would have to wait. Do you agree with 5 that? 6 A. Not wait. I was wondering if I can -- what I read here 7 is that I'm saying is that these should have been dealt 8 with earlier and we've got to deal with them now. And 9 it's got to be dealt with, because they'd not been dealt 10 with earlier, and the timescale and the commitment that 11 was previously given. And so the pressure that was on 12 me, as a minister, and the ministerial team and their 13 technical people, was to ensure that that -- those 14 issues were resolved and resolved effectively, and 15 hopefully maintain the commitment to 2001, which 16 wouldn't be easy to do, given the number of years the 17 commitment -- the previous commitments were out of date. 18 And so that's what that means. It's not dealing 19 with issues that need dealing with, it's complaining 20 that the slippage should never have happened in the way 21 it did, and when it did happen, it should have been 22 dealt with. This goes back again to the senior 23 reporting officer role, et cetera. 24 Q. It may be suggested that the impression that you are 25 giving at that meeting is that speed was now more 176 1 important than technical concerns. What would you say 2 about that? 3 A. No. I'm simply telling them, reminding them what the 4 commitment was and that the slippage was now causing 5 these difficulties. But that doesn't suggest, from me, 6 that I would have -- "Well, let's forget it, let it drop 7 off the end of the truck". Far from it. I wanted this 8 to be resolved. But it was important that the key 9 people on the frontline there knew what was going on, 10 and what the consequences could be, and the consequences 11 could be -- and I can't remember if it did happen -- was 12 that the 2001 commitment would be passed. 13 Q. You've said that you were dependent on the CWU and NFSP 14 raising concerns at this stage about the technical 15 issues. Do you think that the atmosphere was such that 16 they were concerned that they shouldn't raise concerns 17 at that stage because it would delay rollout? 18 A. Are you suggesting that that's what the union's 19 positions were? Is that what you're saying to me? 20 Q. Well, if they were to suggest that it wasn't really 21 an atmosphere in which they could raise technical 22 issues, because of those kinds of time pressures that 23 you've mentioned at paragraph 6 there, would they be 24 right in that or not? 25 A. No, but I can understand that that's why they're all on 177 1 there. Their interest is slightly different from 2 subpostmasters, although they were committed to making 3 sure the subpostmasters were dealt with very well. And 4 it may well be, remembering they were already in 5 discussions with Government senior ministers, including 6 the Secretary of State, regarding the drafting of the 7 White Paper, and it may well have been tactically they 8 wanted to ensure that, in the White Paper, if required, 9 there would be some input/recognition of issues relating 10 to this. 11 And that may well have been what the case was: that 12 they wanted to -- as well as making comment here, they 13 wanted to keep open the door that they had directly to 14 the Secretary of State and others involved in the 15 drafting of the White Paper. 16 Q. Is it your evidence that the atmosphere was such during 17 those meetings that the unions and NFSP were fully able 18 to raise technical concerns, should they have had them? 19 A. Yes. Absolutely no doubt. That's what the meetings 20 were there for: to hear from them. 21 Q. Can we look at NFSP00000471, please. This is a report 22 of the NFSP National Executive Council. It's a document 23 that we've seen several times in this Inquiry. Can we 24 look at page 27. Page 27 at the bottom contains 25 a summary of the same meeting, so 22 June meeting. If 178 1 we go over the page, it says -- a little bit further 2 down, please. 3 It records as having been discussed at that first 4 meeting: 5 "The subject of systems faults was raised and the 6 NFSP were given assurances that there would be software 7 improvements to cure the present difficulties. The 8 Federation were asked for more precise numbers of 9 Subpostmasters who were experiencing difficulties as 10 this information would assist them to provide us with 11 the help we require." 12 That reference to the subject of system faults being 13 raised, that is contained in the NFSP's note of the 14 working party meeting of 22 June but it doesn't appear 15 in the official minutes or note of the working party 16 meeting. Is it something you remember being raised by 17 the NFSP? 18 A. Oh, yes. I mean, that was clearly raised, and it was 19 raised alongside -- because I was acutely aware, on the 20 statement that I'd given to call the meeting, about the 21 importance of the trials and the basis for them, and the 22 range of them. So yes, I remember that. Why it's not 23 in the minutes, I don't know. It's too far away. 24 It wouldn't be my part trying to stop it. The 25 minutes are done by the civil servants, and yes, we get 179 1 them and we've got to approve them. So I must have 2 approved it but to be honest with you, that should be -- 3 should have appeared. 4 Q. So you draw recall the NFSP having raised system faults 5 during that meeting? 6 A. Yeah, not just during that meeting. They'd raised 7 them -- yeah, they'd raised them -- Mr Baker had raised 8 them before, if I remember correctly. 9 Q. Actually, if we could go back to that document again 10 sorry, look at page 23. This report goes on to minute 11 the meeting of the NFSP. So that took place after that 12 first Working Group meeting. This is, again, something 13 you may have seen during this Inquiry. If we look 14 a little bit further down, there's quite a lot of 15 criticism from subpostmasters about the system that's 16 then available. It says, for example: 17 "There was general discussion on the severe 18 difficulties being experienced by subpostmasters who are 19 already running an automated system. Seven sheets of 20 comments from the North East had been passed to Mr Dave 21 Miller." 22 Pausing there, do you remember that at all? Did 23 Dave Miller ever mention to you that he had been 24 passed -- 25 A. Who's Dave Miller? 180 1 Q. From the Post Office? 2 A. No, I don't recognise it. 3 Q. "The difficulties and trauma being experienced by some 4 subpostmasters were giving rise to concerns for their 5 health and emotional wellbeing. It was felt by some 6 that a tragedy was not far away if something was not 7 altered soon. The software was considered to be poor 8 quality and not intended to run such a huge network. 9 The system is based on ECCO which was originally written 10 for a network of 700 -- not 15,500." 11 Perhaps we can go over the page. Similar concerns 12 continue to be expressed and there's a mention there of 13 the General Secretary assuring the meeting that Mr David 14 Miller had been informed of the difficulties in no 15 uncertain terms. Sticking with that paragraph, it says: 16 "We cannot continue to have experienced 17 subpostmasters/mistresses in distress on the telephone 18 struggling until all hours to balance. These situations 19 must not be permitted to arise." 20 Was that level of concern being raised, to the best 21 of your recollection, at the Horizon Working Group 22 meetings? 23 A. That specific example, no. 24 Q. Not that specific example, but perhaps that 25 subpostmasters were distressed by the new system? 181 1 A. Well, if the report that went to Mr Miller had actually 2 come to our committee, I would have seen it and would 3 have dealt with it. That was the whole purpose of the 4 committee. I don't recognise Mr Miller. I apologise to 5 him if he's ever met me, but I just don't remember him 6 in or getting any information from him. And I'm sure if 7 he had sent me information, it would appear in the 8 documents. 9 Q. So, to the best of your recollection of those Horizon 10 Working Group meetings, was that kind of information 11 the -- certainly the emotion that we've seen that's 12 raised at that meeting, or the detail of problems that 13 were being raised at that meeting -- were those kinds of 14 things being raised at the Horizon Working Group or not? 15 A. As a constituency MP in an area where Post Office 16 closures had been going on apace, and also as 17 postmasters and mistresses were coming up for 18 retirement, the difficulties that were then apparent in 19 securing new ownership, and so -- and I was not unaware 20 of the emotional distress and concern and worry that 21 people had, and understandably so, given the potential 22 changes that were to take place and the length of time 23 that it had been taking. 24 We're talking years here. They were having to 25 speculate what was going to happen to their business, 182 1 themselves and the technology and how they would use it. 2 I mean, these people had been under pressure for such 3 a significant time, and that's one of the reasons that 4 we wanted to ensure that we got a settlement and got it 5 in an effective way, or this would just continue into 6 the future, and that would be absolutely wrong. 7 Q. But we're now talking about a position where certain 8 subpostmasters do have the system and are raising 9 concerns about the software, et cetera? 10 A. Yes. 11 Q. Mr Baker's evidence this morning was that he didn't 12 think that the working group was the forum to raise 13 those kinds of technical issues. Is your evidence that 14 those kinds of technical issues were, in fact, raised at 15 the Working Group or not? 16 A. What would have been very helpful -- I'm not criticising 17 him, far from it -- he worked with me over a significant 18 period and so we knew each other pretty well. 19 I would say that his reasoning was a quite clear 20 one, in that he had access to the people who were 21 responsible for dealing with these issues, and so he 22 went direct to them. The issue is if we'd known about 23 it, I could do something effectively. Because I don't 24 know what the outcome was with Mr Miller. But, 25 certainly, if we'd known as a committee -- because 183 1 you'll see in my letter it said about raising issues on 2 the frontline. It was about the frontline and what was 3 happening to it that was critically important to me. 4 Q. Just so we're absolutely clear, because I appreciate 5 we've been going for some time this afternoon, were 6 those kinds of issues in fact raised at the working 7 group or do you think that they were raised separately 8 with Mr Miller and the Post Office? 9 A. Well, it would seem that that's the case with Mr Miller 10 and the Post Office. 11 Q. But you've said also that you were, in any event, aware 12 because those kinds of issues -- 13 A. Yes. 14 Q. -- as a constituency MP? 15 A. Yes, and that's why I had the empathy I did to get the 16 matter resolved and also to ensure that frontline voices 17 were heard. 18 Q. When you say "to get the matter resolved", how was it 19 resolved? 20 A. Apologies. I don't mean that individual case. 21 Q. No, not at all. I just want to make sure there's 22 absolutely no confusion. We're talking now the summer 23 of 1999 and you've said that there were concerns raised 24 at a constituency level. What period was that? 25 A. That was over quite a considerable period, following the 184 1 miners' strike. In areas like my own, there was 2 significant closures. 3 Q. Ah, so your concern was closures, but what about 4 technical problems with Horizon? 5 A. No, I can honestly say I'd had no technical problems 6 raised with me, but what I had noticed and had raised 7 with me was people's anxiety, concern, lack of 8 information, if you want, all sorts of things. And that 9 takes its toll on people, their mental health suffers 10 from that, and the decision making about the next stage 11 in their life is acutely upended, and that's why these 12 signs are as important as some of the technical 13 difficulties that arose. 14 Q. So the concerns that were being raised to you at the 15 Horizon Working Group concerned concerns about the Post 16 Office Network generally, rather than technical issues 17 with Horizon software, for example, the kinds of things 18 that we saw in those NFSP minutes? 19 A. Yes. I think that would be fair to say. I apologise if 20 I forgot, and there was issues raised by Mr Baker. 21 Q. Not at all. In fact, his evidence was to the contrary: 22 that he didn't see the Horizon Working Group as the 23 forum to raise those kinds of technical issues. 24 A. Okay. 25 Q. Was that the impression that you had at the time? 185 1 A. No, not an impression. I mean, it was clear from what 2 I'd said verbally, what I'd written in calling the group 3 together, was I wanted to know what the frontline was 4 experiencing, including, of course, what they thought of 5 the system that was going to be put in, or was being put 6 in, and so that was a major point of why I wanted it to 7 work. 8 Q. I'm going to look very briefly at the next minutes of 9 the 7 July, that's NFSP -- 10 SIR WYN WILLIAMS: Mr Blake, before you do that, I think 11 I should let everybody know that I cannot sit beyond 12 4.30 tonight. I hadn't for a minute thought that these 13 two witnesses would take us right to the end of the day, 14 so to speak. 15 MR BLAKE: I know, sir. I apologise for that. 16 SIR WYN WILLIAMS: I mean, since Sir Ian is remote, it's not 17 as critical, in the sense he might be able to come back 18 much more easily, rather than try and cram everything 19 into five or six minutes. 20 MR BLAKE: Absolutely. 21 Sir Ian, are you able to attend tomorrow morning? 22 THE WITNESS: Yeah, I'll just check, if I can, my diary. It 23 sounds like I've got a full-time job. It just seems 24 that way sometimes, volunteering. I think I'm -- I'll 25 just double check. I may have to cancel an optician. 186 1 MR BLAKE: We won't be longer than -- certainly not more 2 than an hour tomorrow morning. 3 SIR WYN WILLIAMS: It doesn't have to be tomorrow morning, 4 does it, Mr Blake, in the sense that Sir Ian could be 5 fitted in, so to speak, at some suitable moment? 6 MR BLAKE: Yes. 7 THE WITNESS: Tomorrow is Friday? 8 MR BLAKE: Tomorrow is Thursday. 9 THE WITNESS: No, Thursday, sorry. Other than having 10 a Scottish Labour Party dinner, which I'm not going to, 11 we're free. 12 SIR WYN WILLIAMS: So could you come back at 10.00 tomorrow 13 morning, Sir Ian? 14 THE WITNESS: Yes, I can. 15 SIR WYN WILLIAMS: Well, then, I propose to call a halt at 16 this point, Mr Blake. Yes? 17 MR BLAKE: Absolutely. 18 Sir, I wonder, can I just take -- it may be that we 19 need to start slightly earlier tomorrow, only because we 20 have, I think, it's Alan Milburn tomorrow, who may have 21 other commitments. Would it be a problem for everybody 22 if we started at 9.30 tomorrow? 23 SIR WYN WILLIAMS: Well, for Sir Ian and I, it's probably 24 not a problem at all but, as for the people in the hall, 25 they'd better say now. 187 1 MR BLAKE: Everybody seems to be in agreement that 9.30 is 2 absolutely fine tomorrow. 3 SIR WYN WILLIAMS: Right, we'll break now and start again at 4 9.30 tomorrow, so as to ensure that everybody who is due 5 to give evidence tomorrow has sufficient time to do it. 6 MR BLAKE: Thank you very much. 7 SIR WYN WILLIAMS: Thank you all. 8 THE WITNESS: Thank you. 9 (4.25 pm) 10 (The hearing adjourned until 9.30 am the following day) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 188 1 I N D E X 2 COLIN HERBERT BAKER (sworn) ..........................1 3 4 Questioned by MS KENNEDY ......................1 5 6 Questioned by SIR WYN WILLIAMS ...............86 7 8 Questioned by MR STEIN .......................88 9 10 Questioned by MS PAGE ........................97 11 12 Questioned by MS WATT .......................108 13 14 Further questioned by MS KENNEDY ............111 15 16 SIR IAN McCARTNEY (affirmed) .......................113 17 18 Questioned by MR BLAKE .....................113 19 20 21 22 23 24 25 189