Post Office scandal accountability lies with govt, minister says – as audience groans at Lib Dem leader

A senior minister has told the Post Office Horizon IT Inquiry that accountability for the scandal lies with the government, while the leader of the Liberal Democrats said he was lied to by senior executives at the company.

Cabinet Office minister Pat McFadden was postal affairs minister from 2007 to 2009, years in which the biggest miscarriage of justice was taking place.

Lib Dem leader Sir Ed Davey, who was postal affairs minister from 2010 to 2012, was also giving evidence to the inquiry established to investigate the Post Office’s wrongful prosecution of more than 700 sub-postmasters.

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He said he had been lied to by the Post Office and named specific individuals – former managing director David Smith and ex-chief executive Paula Vennells.

“If you are lied to directly by your officials, or indirectly by an arm’s length body like the Post Office, it seems to me inherently difficult for any minister with a complex and busy portfolio to have sufficient information to question the replies they have received in good faith,” Sir Ed’s witness statement said.

“Nonetheless, I wish I had somehow managed to see through the misinformation I was given, and I am sorry I didn’t.”

The audience at the inquiry groaned as Sir Ed said he did not remember reading a first letter from former sub-postmaster Sir Alan Bates requesting a meeting about the issue.

He had signed off a response saying he did not believe a meeting would “serve any useful purpose”.

Sir Ed said it was a “terse” reply and apologised. He admitted it was “poorly judged” and added that it had been driven by advice that he did not question at the time.

A theme in his evidence was that he followed the advice given to him by officials in his department.

As he stood in the witness box, the new government announced that it would give an update on the compensation process for sub-postmasters before parliament’s summer recess.

Government accountability

The role played by the government in not identifying the scandal was in focus during evidence to the inquiry on Thursday morning.

In his evidence, Mr McFadden said: “if it’s state-owned, ultimately the accountability will lie with the government.

“I do want to stress that the legislation that had been passed and the Postal Services Act had deliberately created this separation.”

Making ministers “shadow chief executives”, however, would not prevent heads of state-owned companies going “rogue”, he said, adding that ministers were “reliant” on the information they were given.

Faulty accounting software called Horizon was used by the Post Office since the early 2000s. The computer programme incorrectly generated financial losses and sub-postmasters in branches across the UK were prosecuted for theft and false accounting by the Post Office itself on that basis.

Renewed attention has been paid to the inquiry due to ITV drama Mr Bates Vs The Post Office.

‘I wish I had done more’

Despite the fact he was written to by former home secretary Jacqui Smith about her sub-postmaster constituent’s concerns, Mr McFadden did not raise the alarm with the Post Office.

“Rereading this correspondence now, and knowing the injustice done to so many sub-postmasters, of course I wish I had done more to ask the Post Office if they were really sure their IT system was as robust as they suggested,” he said.

He also denied speaking to then business secretary John Hutton about allegations made by sub-postmasters about Horizon.

Nor did any of the officials working in the department raise the issue with him, he said. “I have no evidence or reason to believe that the officials in the department were receiving any information different to that set out in the replies from the Post Office,” his witness statement said.

“Ministers are reliant on the information they get from officials.”

Reflecting on whether he could have done more to ask the Post Office if its IT system was robust, Mr McFadden said: “If I had done so, I suspect [the Post Office] would have continued to insist that it was not to blame for these accounting errors and they would have continued to use the court judgments as proof points.”

He became aware of prosecutions in February 2009, he added.