Former Post Office boss Paula Vennells suggested there was a “temptation” for subpostmasters to borrow money from tills as she stubbornly defended the Horizon IT system, the inquiry heard today.
In another dark day of evidence, Tory peer James Arbuthnot, who doggedly campaigned on the scandal, said she repeatedly insisted the system was “robust” and hid crucial information from him.
He said the Post Office operated a “behind the scenes deception process” and was “stringing MPs along” to defend the faulty IT system and the company’s reputation. The inquiry heard the firm was “incredibly defensive”, with staff appearing to fear “career death” if they admitted failings in the system.
Speaking about a meeting held in 2012, the former North East Hampshire MP said former Post Office chairwoman Alice Perkins and Ms Vennells “both raised the problem of there being lots and lots of cash lying around in unexpected places”. "Whether this meant that they thought that that led subpostmasters into temptation and being inherently dishonest wasn't entirely clear, but that was the issue they were raising I think,” he said.
Tory peer James Arbuthnot, who doggedly campaigned on the scandal, gave evidence to the inquiry (PA)Former subpostmaster Nikki Arch, who lost her business and home because of the scandal, said it was "hard" to hear the evidence today. She said the Post Office clearly thought subpostmasters "were guilty from day dot", telling the BBC: "It’s been 24 years, I can't afford to be too angry, but it’s hard."
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Counsel to the inquiry Jason Beer KC listed at least 17 issues including bugs in the software and court cases which the Post Office knew about before important meetings with Lord Arbuthnot. But the Tory peer repeatedly said he had not been informed of any of them. These included the case of Lancashire postmistress Julie Wolstenholme in 2003, which the Post Office settled out of court after an IT expert concluded there were bugs in Horizon.
In another damning moment, Ms Vennells was accused of making a "false statement" to a Government minister in 2012 when she said "in every instance, the court has found in our favour". Mr Beer told the Inquiry this was "just not true".
Lord Arbuthnot, who was portrayed by Alex Jennings in the ITV drama Mr Bates vs The Post Office, took up the cause after his constituent Jo Hamilton was prosecuted for a shortfall of £36,000 at her Post Office in South Warnborough, Hampshire in 2006. He said “seeds of doubt arose” about the Post Office’s “approach to the truth” in the way it told people like her “you’re the only one” with issues with Horizon.
He branded the Post Office a “dangerous dog” as he criticised the Government’s approach to the company at the time. “You cannot say that the dangerous dog has an arms-length relationship with you if the dangerous dog behaves badly,” he said.
Lord Arbuthnot later described the Post Office’s “slowness” and “secrecy” towards an investigation into Horizon in 2012 by forensic accountants Second Sight. In an email to him in 2013, the organisation's managing director Ron Warmington criticised the Post Office for not answering “the blasted questions” they were asking.
“They are still - understandably I suppose - incredibly defensive and nobody - at the levels producing the responses - is ready to give an inch,” he said. “They probably fear it will be career death to concede any failings whatsoever.”
Lord Arbuthnot said the report, published in 2014, had many “damning” points and proved prosecutions were unsafe. He said Ms Vennells became “defensive, legalistic and determined to keep information from MPs” after this point, with the Post Office rejecting the report's findings. Thereafter he and other MPs “essentially broke off relations” as they “couldn’t trust the Post Office anymore”.
Lord Arbuthnot was portrayed by Alex Jennings in the ITV drama Mr Bates vs The Post Office (ITV)Sir Anthony Hooper, the former chairman of the mediation scheme, told the Inquiry he repeatedly told Ms Vennells that the whole case "didn't make sense". The Post Office established the scheme in 2013 to try to resolve complaints from subpostmasters but it broke down in 2015.
Sir Anthony, a retired judge, told the inquiry: "I tried to make it clear to Paula Vennells and to the chairman that the Post Office case didn't make sense, and I felt that throughout and, no doubt, Second Sight did. It didn't make sense that reputable subpostmasters, appointed by the Post Office after an examination of their characters, would be stealing these sums of money.
"It didn't make sense, in particular because within a matter of days of any 'alleged theft' they had to balance the books." He said he made this point "over and over again" to Ms Vennells and Ms Perkins, adding: "It just never made sense."
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By 2014, he said he thought there was "likely" to have been "serious miscarriages of justice". He said: "My view, at least by the middle of 2014, was that there was likely to have been serious miscarriages of justice. My initial view that it was very unlikely that these people had stolen money remained.
"I wanted people who probably already left prison, people who had suffered so badly, I wanted everyone to get on, identify the miscarriages of justice by one route or another, get their convictions quashed - that's what I wanted."
Sir Anthony described the case of wrongly convicted postmasters as the "greatest scandal I have ever seen in the criminal justice process". He became emotional as he said "something went very, very wrong" and said he was "very worried" about the current approach to criminal justice trials.
Ms Vennells, who was chief executive of the Post Office from 2012 to 2019, has been summoned to give evidence to the inquiry for three days in May. She handed back her CBE earlier this year after more than 1.2million people signed a petition demanding she be stripped of the honour.
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