Chief of staff to ex-Post Office chief Paula Vennells drafted email ‘to discourage investigating prosecutions’ – as it happened

Former Post Office and Royal Mail chairman Allan Leighton gave testimony at the public inquiry into the Horizon IT scandal, saying he was “absolutely horrified” at the miscarriage of justice but was kept in the dark.

Leighton, who held roles from 2001 to 2009, also said that the Horizon IT system was described as “fit for purpose” in every board meeting he attended during his nine year stint.

The inquiry also heard from Paula Vennells’ former chief of staff, Martin Edwards, who is still employed at the Post Office.

Evidence at the inquiry revealed that he wrote a “setting the hares” running email for Vennells to use to minimise questions from the board as the prospect of a wave of appeals against unsafe prosecutions by subpostmasters was raised in a key report by forensic accountants Second Sight.

Elsewhere, NatWest has paid £2.4bn to buy rival Metro Bank’s mortgage book, and revealed it spent £24m on the Sir Trevor McDonald-fronted share sale campaign that was axed ahead of the general election.

The Competition and Markets Authority (CMA) has said drivers are still paying too much for fuel, with increases in retailers’ fuel margins costing consumers £1.6bn last year.

The UK competition regulator also said that it is “unlikely” that supermarkets are iinflating prices to make loyalty card holder deals look misleadingly attractive.

Drax Group, the UK’s largest source of renewable energy, reported a 37% increase in profits in the first six months and announced a two-year, £300m share buyback scheme.

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Paula Vennells’ former chief of staff warned of “setting the hares running” amongst board members as the prospect of a wave of appeals against unsafe prosecutions by subpostmasters, drafting an email position the Post Office chief executive could use to minimise questions about the Horizon IT scandal and legal action.

The public inquiry into how the scandal has heard how Martin Edwards, Vennell’s chief of staff between 2012 and 2014, was one of a handful of trusted lieutenants who regularly worked up briefs for use by top executives defending the Post Office and Horizon IT system as evidence mounted that it was faulty.

Ahead of the official publication of the interim report by Second Sight, in which the forensic accountants raised serious issues about Horizon with findings that could open the door to mass appeals for wrongful prosecutions, Edwards was heavily involved in preparing Vennell’s explanation to the board.

“Obviously the points about the ombudsman and past prosecutions could set the hares running,” Edwards wrote in an email to Vennells and former Post Office general counsel Susan Crichton. “Suggested draft email for the board below.”

Counsel for the public inquiry suggested that Edwards “set the hares running” comment and subsequent draft email was an attempt to ensure that the board did not start investigating the Horizon IT scandal and prosecutions.

“I was absolutely referring to the potential reaction of the board,” said Edwards in his testimony. “I don’t think I am saying there is anything wrong with them asking questions. This was as I understood it going further than Paula had briefed the board previously. “At the time the view of the business wasn’t that previous prosecutions had been unsound. This email reflects the mindset of the business at the time. Clearly there wasn’t enough focus on the safety of those prosecutions and the human impact.”

In his witness statement Edwards repeatedly referred to his role as being simply a “conduit” for his bosses, that he always checked with “subject experts” before briefs or emails he created were used, and that he did not have any did not have any “specific decision-making accountabilities”.

However, a string of examples of emails and brief writing tasks, often with the Post Office head of communications Mark Davies, showed that he frequently took a lead role in formulating briefs.

At one point counsel for the inquiry suggested he might change his witness statement to more accurately say he was “deeply involved” in orchestrating the Post Office position on Horizon.

“What I am not doing is unilaterally altering [a] brief and putting it to Paula,” he said. “I co-ordinated it. I held the pen on it.”

Following the publication of Second Sight’s interim report in July 2013 Edwards took exception to a BBC headline saying that the Horizon IT system caused postmasters to lose money every year.

He emailed the Post Office team suggesting that it be corrected calling the BBC “arseholes”.

“That was a bit of an uncharacteristic email from me,” he said. “There was clearly a strong conviction at the time in the integrity of Horizon. I don’t think at that point in time I would have particularly recognised it as a ‘them versus us’ mindset. It was clearly one of those emails you regret. It was an overreaction.”

Edwards remains employed at the Post Office in the role of network strategy and delivery director where he said he liaises with subpostmasters.

Supermarkets are “unlikely” to be inflating prices to make loyalty card holder deals look misleadingly attractive, says competition watchdog

Sarah Butler

Initial analysis of thousands of grocery prices indicates it is unlikely that supermarkets are artificially inflating the price of everyday goods to make the prices for loyalty card holders appear misleadingly attractive, according to the competition watchdog.

The Competition and Markets Authority said it was still scanning tens of thousands of prices and has commissioned a consumer survey to understand the impact of loyalty pricing on how we shop, including how much people shop around and compare prices. It is also examining how supermarkets’ loyalty prices compare to those prices charged by rivals at the same point in time.

It expects to report on its findings in November.

Last year, the body began an investigation into the effect on consumers of the rise of loyalty card price cuts amid concerns that they could limit competition and lead to price rises for shoppers not signed up to such marketing schemes.

Sainsbury’s began offering special discounts for its Nectar card holders last spring when the Co-op also brought in members’ pricing on some core products, while Tesco has ramped up use of its Clubcard discounts so that it now covers thousands of products. Lidl launched a loyalty scheme in 2020 and updated it in 2022 so that shoppers had to spend more to get the top level of discounts.

The CMA will also publish interim findings on its study into pricing on infant formula this autumn and a final report in February next year as it said it wanted to engage with new administrations across the UK following the election.

The studies are part of a wider look at whether supermarkets used soaring inflation on the cost of goods to mask an effort to increase their own profits.

On Friday the CMA said continued monitoring of supermarkets’ profit margins showed that they had increased in the past year but remained “broadly at or below” 2020 levels.

A former chair of Royal Mail and the Post Office has said the fitness for purpose of the Horizon IT system was discussed at every board meeting, but never once were signifcant faults, bugs or legal actions raised in his nine year tenure.

Allan Leighton, who worked for Royal Mail and the Post Office from 2001 to 2009, said that the constant discussion of Horizon was the “most significant oversight” of an IT system he had ever seen.

Sam Stevens, counsel for the Horizon IT inquiry, asked Leighton how often the “fitness for purpose” of Horizon came up in board meetings.

“All of the time,” said Leighton. “The most significant thing about this Horizon project… is that there [was] not a board meeting that goes by that it is not talked about. The amount of oversight on Horizon was extremely high. I feel very confident having read all the papers and reminded myself that the oversight of the Horizon project was more significant than I have seen on any IT project. There [was] not a board meeting of Royal Mail or the Post office where Horizon [was] not discussed.

However, Leighton said that two significant legal cases undertaken by the Post Office that cast doubt on the resilience of the Horizon system that he said should have been raised to board level were not.

In 2004, the Post Office settled without prosecution in a case that contained an expert report suggesting there were problems with Horizon.

In 2006, in the case of Lee Castleton, one of the most high-profile civil suit that resulted in the post office operator being made bankrupt over an alleged £25,000 shortfall, Castleton testified that there were no losses and that Horizon was to blame.

Leighton said that the cases should “absolutely” have been discussed at board level.

“Systemic issues and some of bugs that [eventually] came out were never brought to me or the board’s attention,” he said. “That should have come up via the operation and legal functions.”

Allan Leighton, the former chairman of the Royal Mail and Post Office, has said that he is “absolutely horrified” by the wrongful prosecution of hundreds of subpostmasters but was not made aware of problems with the Horizon IT system or the scale of legal action.

Leighton, who worked at the two organisations between 2001 and 2009, expressed “heartfelt sympathies to all those so terribly affected by these miscarriages of justice”.

“I have been absolutely horrified by the information I have seen subsequently emerge about the improper prosecution of subpostmasters,” he said in a witness statement.

However, Leighton said that he was never made aware of problems with the Horizon IT system and was never told about the scale of the private prosecution strategy the Post Office management was pursuing.

“We had no idea of the numbers of prosecutions that were taking place,” he told the inquiry on Friday. “That was never raised up [to the board] over a long period of time. “[There was] never a discussion about the number of prosecutions taking place at the Post Office itself. It was never seen as an issue in the organisation. This was not a priority at the time.”

Leighton said that there were “clearly procedures that should have taken place” and it was a “mistake” for teams working on the prosecutions not to raise it to board level.

“Boards tend to react to significant issues,” he said. “It was never flagged up. The issue was there was nothing coming to the board from any direction.”

Between 1999 and 2015 the Post Office relentlessly pursued branch owner-operators across the UK for alleged theft, fraud and false accounting, despite knowing there were faults in Horizon IT accounting software installed by Fujitsu in the late 1990s.

In total, some 3,500 sub-postmasters and mistresses were wrongly accused of taking money from their businesses, with more than 900 prosecuted in harrowing court cases despite protesting their innocence and raising issues with the IT system in their defence.

The scandal has often been described as the most widespread carriage of misjustice in UK history.

Allan Leighton, the former chair of Royal Mail and the Post Office, has started his testimony at the public inquiry into the scandal.

Leighton was affiliated to the Royal Mail between 2001 and 2009, and the Post Office between 2002 and 2009.

He was the Royal Mail chairman when some of the cases wrongly prosecuting post officer operators, because of incorrect information from the Horizon IT system, were brought to court.

Leighton gave testimony to the inquiry in April. However, due to a technical fault with the recording, he has returned to confirm his evidence.

He may give new answers, or change his testimony, as the inquiry continues this morning.

Between 1999 and 2015 the Post Office relentlessly pursued branch owner-operators across the UK for alleged theft, fraud and false accounting, despite knowing there were faults in Horizon IT accounting software installed by Fujitsu in the late 1990s.

In total, some 3,500 sub-postmasters and mistresses were wrongly accused of taking money from their businesses, with more than 900 prosecuted in harrowing court cases despite protesting their innocence and raising issues with the IT system in their defence.

The scandal has often been described as the most widespread miscarriage of justice in UK history.

Drax Group, the UK’s largest source of renewable energy, has reported profits of £463m in the six months to the end of June, up from £338m in the same period last year.

The performance prompted the company, which announced a two-year £300m share buyback scheme starting in the next quarter, to up its full year profit forecast to the top end of analyst expectations.

Shares in Drax, which in January received permission from the government to fit carbon capture technology to its wood-burning power plant in a project that could cost bill-payers more than £40bn, surged 12% in early trading a investors responded positively to the results.

Will Gardiner, chief executive of Drax, said:

Drax has delivered a strong operational performance, playing an important role supporting the UK energy system with dispatchable, renewable power, keeping the lights on for millions of homes and businesses.

Drax, which has converted four coal-power units to use biomass and operates hydro power projects, is set to see the end of a government subsidy for biomass generation in 2027.

Drivers are still paying too much for their fuel, with increases in retailers’ fuel margins costing consumers £1.6bn last year, according to the Competition and Markets Authority (CMA).

The regulator said that retail margins remain “significantly” above historic levels, a year after criticising the market for failing customers.

The CMA said that retailers’ fuel margins – the difference between what they pay for their fuel and the price they sell it at – remain high with supermarkets’ fuel margins roughly double what they were in 2019.

Sarah Cardell, chief executive of the CMA, said:

Last year we found that competition in the road fuel market was failing consumers, and published proposals that would revitalise competition amongst fuel retailers. One year on and drivers are still paying too much.

The RAC said that it has already written to the new energy secretary to try to get action taken on the issue, following the findings of the third monitoring report by the CMA.

Simon Williams, head of policy at the RAC, said:

To see that drivers have paid £1.6bn more than they should have in the last year is nothing short of outrageous, especially when so many are dependent on their vehicles. Drivers have every right to feel ripped off, especially knowing there is virtually no market competition between retailers. Our analysis has long shown that even accounting for retailers’ increased operating costs, margins on fuel are at extremely questionable levels.

Good morning, and welcome to our live, rolling coverage of business, economics and financial markets.

NatWest was forced to spend £24m on the former Tory government’s shelved “Tell Sid” campaign featuring Sir Trevor McDonald to promote the sale of the bank’s shares to the public.

NatWest’s bill for the campaign, which was set to launch within days of Rishi Sunak announcing the surprise early summer election which scuppered the roll-out, was revealed as it also announced that it has acquired a raft of mortgages from Metro Bank for £2.4bn.

The bank was forced to stump up for part of what would have been a £10m-plus advertising push – which included TV ads featuring the veteran newsreader and presenter popping up around the UK asking the public “Are you in?” – because of agreements with the government dating back to the tax-payer funded bailout in 2008.

NatWest has had to pay for part of the preparation costs for the sale, including toward the production of the advertising, printing and distributing documents, as well as legal fees and expenses.

The campaign was part of the Tory party’s efforts to return the bank – formerly known as Royal Bank of Scotland – to private ownership by 2025-26, following its £46bn taxpayer bailout during the height of the financial crisis. There were also hopes that the campaign would encourage everyday savers to start investing in British stocks.

The nationwide push had been originally intended as a “pre-election sweetener” to help the Tories.

The Agenda

• 9am BST: Italy business and consumer confidence, July

• From 945am BST: Allan Leighton, former chair of Royal Mail and Post Office, to give evidence at the Horizon IT public inquiry

• 1pm BST: USA Core PCE Price Index (June), PCE Price Index (June)