The Post Office is an “atrocious” organisation which should be sold off to Amazon, said campaigner Alan Bates as he branded his former employers as a “dead duck”.
The former subpostmaster said the institution is now “beyond saving” in the wake of the Horizon IT scandal, where hundreds of subpostmasters were persecuted and wrongly prosecuted.
Asked about the Post Office’s culture, Mr Bates told the public inquiry: “It’s an atrocious organisation.
“They need disbanding. It needs removing. It needs building up again from the ground floor.
“The whole of the postal service nowadays – it’s a dead duck. It’s beyond saving.
“It needs to be sold to someone like Amazon. It needs a real big injection of money and I only think that can happen coming in from the outside.
“Otherwise it’s going to be a bugbear for the government for the years to come.”
Mr Bates’ evidence came on the first day of the fifth phase of the public inquiry, which is examining the Post Office response to the growing Horizon scandal and the response of others to the crisis, including those in government.
The campaigner, who led the campaign for justice, said the government must be “held responsible” for the Horizon IT scandal, and told the public inquiry he took offence when Sir Ed Davey called it an “arm’s length” organisation.
Mr Bates, a former subpostmaster in North Wales, spearheaded the campaign after hundreds of branch managers were wrongly held responsible for, and prosecuted over, supposed missing money.
Glitches in the Horizon IT system were known about within the Post Office, but it continued to rely on the system in prosecutions and publicly insist that the technology was totally reliable.
Giving his evidence to the public inquiry into the scandal, Mr Bates said the government – as sole shareholder in the Post Office – must take responsibility for the failings.
“Government were pumping huge amounts of money into Post Office year after year so they need to be held responsible”, he said.
“They need to be addressed really about the way that they had been going on.
“It was very hard to engage them in it – not nowadays, they’re a bit more interested these days – but at that time, trying to get government to try and take it on board seriously, it was very hard.”
Lib Dem leader Sir Ed Davey has found himself in the firing line as he was postal affairs minister in 2010, during the Coalition government and at the time when the Horizon scandal was ongoing.
Mr Bates wrote to Sir Ed in May 2010 on behalf of the Justice for Subpostmasters Alliance (JFSA) group to request a meeting with him to discuss issues related to the Horizon IT system.
The request was initially declined, and a Civil Service briefing note shown to the Inquiry recommended that a meeting should take place after Mr Bates sent a second letter, but only for “presentational reasons against the background of potential publicity”.
Sir Ed responded to Mr Bates’ initial letter saying the government had adopted “an arm’s length relationship” with Post Office Ltd so it had “commercial freedom” to run operations without interference from the government.
Mr Bates said of Sir Ed’s response to his first letter: “It was disappointing because they had not read or taken into account anything which I had said in my previous correspondence.
“It appeared to be a standard template response.
“I took offence at the phrase ‘arm’s length’, as detailed in my response dated 8 July 2010.”
When questioned by counsel to the inquiry Jason Beer KC on why he took offence at Sir Ed’s letter in 2010, Mr Bates said: “It was because of the structure, wasn’t it?
“The government was the sole shareholder, they were the owners, as such, of all of this.
“How can you run or take responsibility for an organisation without having some interest in… or trying to be in control?”
Following an exchange of letters, Sir Ed and Mr Bates met in October that year, after a delay of five months.
Asked if he remembers the outcome of the meeting, Mr Bates replied: “I don’t recall the detail of the meeting and I’m quite certain that if there had been something positive that was coming out of it, I’d have remembered that.”
Responding to the evidence at the Inquiry, a Liberal Democrat spokesman said: “Alan Bates is a hero for all he has done to represent subpostmasters through this horrific miscarriage of justice.
“Ed was the first minister to meet with Mr Bates and took his concerns to thePost Office and the Federation of Subpostmasters. Ed, like Mr Bates and so many others, was lied to. No-one knew the scale of these lies until the whistleblower from Fujitsu revealed the truth several years later.
“Ed has said that he’s sorry that he didn’t see through the Post Office’s lies, and that it took him five months to meet Mr Bates.
“The Liberal Democrats are calling on the Government to ensure postmasters get full and fair compensation urgently, and Post Office executives who lied for decades are held properly to account.”
Earlier, Mr Bates said the Post Office has spent nearly a quarter of a century “lying” and attempting to “silence me” as he fought for justice in the Horizon IT scandal.
Mr Bates says criminal prosecutions should now be considered for those who led the organisation.
He said he first identified problems with the Horizon IT system in late 2000, but his letter to Post Office - setting out his lack of confidence in the system - went unanswered.
His contract as a subpostmaster in Llandudno, North Wales, was ultimately terminated after long-running disputes with Post Office over Horizon.
Mr Bates founded the Justice for Subpostmasters Alliance and took on the Post Office over the mass persecution and prosecution of innocent branch managers.
The story was recently turned into a hit ITV drama – Mr Bates vs The Post Office – which chronicled his years of campaigning in search of justice.
Mr Bates is the first witness to give evidence to the fifth phase of the Post Office Horizon IT public inquiry into the scandal.
Kevin Hollinrake, the Post Office minister, has also said he believes those responsible for the scandal should "go to jail".
Mr Bates told the inquiry he believes he was dismissed by Post Office after spotting faults and glitches in Horizon, and started with his own campaign which grew into a bigger “cause”.
In a letter to Post Office in December 2000, Mr Bates disputed a shortfall of £1182.81 appearing on his Horizon accounting system.
He set out his evidence that “proved beyond any doubt that the Horizon system cannot be relied upon to give 100 per cent accurate figures”.
Mr Bates, who had years of experience with electronic payment systems prior to joining Post Office in 1998, refused to pay for the shortfall, and also stated in his letter that he knew of others suffering from similar IT issues.
Mr Bates told the inquiry he “never” received a response to his letter, but the initial shortfall was eventually written off by Post Office in 2002, along with a comment that it had needed to “formulate a consistent response to all such cases”.
Speaking about his eventual dismissal, Mr Bates said he believes the Post Office sought to “teach me a lesson”.
“I was annoyed with them, to put it mildly”, he said. “But I think it was partly expected.
“It was pretty obvious they were after me, one way or another. the build up of correspondence over the period was certainly pointing in that direction.”
He said no formal reason was given for his dismissal.
An internal document was shown to the inquiry, claiming Mr Bates had received “copious” support, struggled with accounting, and had become “unmanageable”.
Letting out a chuckle, Mr Bates denied all the claims and said if he had followed the advice that was given to him by the Post Office he would have bankrupted himself.
“They didn’t like me standing up to them, they were finding it awkward, and I don’t think they could answer these questions”, he said.
“They had a feeling I was going to carry on in a similar vein going forward.”
At the outset of Tuesday’s hearing, lead counsel to the inquiry Jason Beer KC updated the inquiry about the latest incident of late disclosure of documents by the Post Office.
He said the Post Office has disclosed more than 73,000 documents to the inquiry since the last phase concluded, and a further 5000 documents have come forward since the end of March. This includes emails and documents relating to advisory firms hired by the Post Office, as well as personal assistants to top figures include former chief executive Paula Vennells.
Mr Beer added that the late disclosure of documents is “sub-optimal” and “highly disruptive”, and is behaviour from the Post Office that has become “extremely and unfortunately familiar”.
Mr Bates led a group of 555 subpostmasters who took the Post Office to the High Court over the scandal.
In 2019, a judge ruled there had been errors and defects in the Horizon computer system used to log finances at branches around the country.
The Horizon system had been relied on in a mass of criminal prosecutions against subpostmasters who were wrongly accused of fraud and theft.
The Post Office insisted for years that the IT system was infallible, therefore the branch managers must be responsible for missing money.
However glitches in the IT system meant money looked as if it was missing from many branch accounts, when in fact it was not.
The scandal, which was ongoing from 1999 until 2015, represents one of the biggest miscarriages of justice in UK legal history and more than 100 subpostmasters have had their convictions quashed by the Court of Appeal.
In the latest phase of the inquiry, prominent witnesses include Lord Arbuthnot, the former MP for North East Hampshire, who helped subpostmasters in their fight for justice and was a member of the Horizon Compensation Advisory Board.
Ms Vennells, who led the Post Office at the height of the scandal, will face the inquiry in late May.
Angela van den Bogerd, former Post Office head of partnerships, Adam Crozier, who was chief executive of Royal Mail from February 2003 to 2010, and Dame Moya Greene, who replaced him and left in 2018, are all also due to give evidence.
Conservative ministers including Greg Clark, business secretary from 2016-2019, Kelly Tolhurst, postal services minister from July 2018 to February 2020, Margot James, who held the role between July 2016 and January 2018, and Cabinet Office minister Baroness Neville-Rolfe, who was postal affairs minister in 2015 are also witnesses.
The Post Office has said it “regrets” that documents were not disclosed to the Horizon IT Inquiry “as early as all parties would have liked”.
A Post Office spokeswoman said: “We are fully committed to supporting the inquiry to establish the truth and we have disclosed almost half-a-million documents to date, reflecting both the unprecedented scale of the issues in the scandal and our commitment to transparency.
“This follows searches of over 176 million documents, 230 physical locations and third-party sites, and across multiple systems.
“During the past six weeks, since the inquiry announced its current hearings timetable, we have disclosed the vast majority of documents required for those witnesses but regret a very small proportion of documents were not disclosed as early as all parties would have liked.
“The inquiry is examining issues that spanned more than two decades, including a lengthy period when Post Office was part of Royal Mail Group.
“Disclosure is therefore highly complex and we continue to do all we can to deliver continuous improvements and incorporate past learnings into the disclosure process to avoid the risk of delays to the inquiry’s timetable.”
