How Ed Davey and ministers shrugged off warnings about Post Office scandal

In May 2010, hours after being appointed postal affairs minister, Ed Davey received a plea for help from Alan Bates. It was to be the first of many. Bates was a former sub-postmaster whose contract was terminated by the Post Office after he began asking too many questions about its flawed Horizon IT system. His tireless campaign for justice is the inspiration for Mr Bates vs The Post Office, the four-part ITV drama in which he is played by Toby Jones.

He had been trying to raise concerns with the Labour government unsuccessfully until, in November 2009, he joined together with other victims to form the Justice For Sub-postmasters Alliance (JFSA) to prove their innocence.

When the Conservative-Lib Dem coalition was formed six months later, Bates hoped it would herald a change of approach and wasted no time in seeking a meeting with Davey, the minister for employment relations, consumer and postal affairs.

∙ When did the Post Office scandal start? Timeline of key events

A sub-postmaster tells her story

But the Lib Dem minister’s 121-word response, stating that a meeting would not serve “any useful purpose”, was to Bates not just “disappointing” but “offensive”.

It is part of a cache of correspondence he has passed to The Sunday Times, much of which has never been published before and which reveals his deep frustration with ministers from three successive administrations between 2010 and 2019.

Crucially, it sheds new light on the five years of the coalition — the pivotal period in which the Post Office attempted to cover up the biggest miscarriage of justice in British history — during which Davey and his fellow Lib Dem ministers Sir Vince Cable and Jo Swinson ran the business department, responsible for the Post Office’s oversight.

Sir Ed Davey: postal affairs minister, May 2010 – February 2012

When Davey was appointed in 2010, he appeared to have the requisite experience; he previously spent four years working for Omega Partners, a consultancy, where he specialised in the postal services sector.

By the time he joined government, questions were already being raised publicly about Horizon, the computer accounting system owned by Fujitsu which had been rolled out across thousands of post offices over the previous decade.

There had also been a number of high-profile prosecutions of sub-postmasters. On May 11, 2009, the magazine Computer Weekly published the first major piece on the scandal, revealing the plight of seven sub-postmasters — Bates included — and raising concerns about Horizon.

Sir Ed Davey received multiple letters from Alan Bates, the former sub-postmaster whose battle for justice has inspired an ITV drama

PA

Bates, in his first of at least five letters to Davey, on May 20, 2010, revealed the JFSA group had now grown to “close to 100” members whose hounding by the Post Office, he said, stemmed “from the flaws of the Horizon system the Post Office introduced and which they refuse to admit has ever suffered from a single problem”.

Urging Davey to intervene, he added: “The evidence is there to be found by anyone in a position of being able to unlock doors instead of placing barriers in the way of those pursuing the information. An independent external investigation instigated at ministerial level would be the most appropriate, and would without any doubt easily find evidence of the error-ridden system.”

Davey, however, could not have been more dismissive. On May 31, 2010, he told Bates: “The integrity of the Post Office Horizon system is an operational and contractual matter for POL [Post Office Ltd] and not government [and] whilst I do appreciate your concerns … I do not believe a meeting would serve any useful purpose.” Davey added that the decision to treat the Post Office as an “arm’s length” body meant it had the “commercial freedom to run its business operations without interference”. A spokesman for Davey says now that he was advised by officials that the matter was for the Post Office.

Taken aback, Bates wrote again to Davey on July 8, 2010, noting that his response to the “very serious issues I had raised was not only disappointing but I actually found your comments offensive”. While there were “new politicians in post”, Bates said that Davey’s letter was “little different to the one” sent by Stephen Timms, the former Labour minister with responsibility for postal affairs, “seven years ago”.

“It is because you have adopted an arm’s length relationship … [that] you have enabled them to carry on with impunity regardless of the human misery and suffering they inflict,” he continued.

Urging Davey not to simply listen to “your civil servants” and to accept without question the Post Office’s claims that “Horizon is wonderful, that there has never been a problem”, he added: “You can meet with us and hear the real truth behind Horizon.”

Bates told Davey that his response had been “not only disappointing but … offensive”

REX

At this point Davey relented and the pair met. In a follow-up letter sent on October 14, 2010, Bates sought to elaborate on a number of issues they had discussed, including how clauses in the employment contracts of sub-postmasters had been “employed to try to stop me and others raising concerns over Horizon”.

He also raised concerns that individual terminals operated by sub-postmasters could be accessed remotely and that this “may be the cause of these major unexplained losses that suddenly occur in sub offices”. The issue of remote access would prove pivotal to JFSA’s successful legal challenge against the Post Office several years later, but at the time when Bates was writing to Davey, it was fiercely denied by the Post Office.

Bates concluded that there was a “genuine willingness at this time to work with you and your department to help resolve these problems if you are prepared to do so”.

Seven days later, on October 21, 2010, Bates wrote for a fourth time to notify Davey of “yet another victim”. Seema Misra, whose prosecution is now considered one of the most egregious of the Horizon scandal, had that day been convicted by a jury after she was accused by the Post Office of false accounting and stealing more than £70,000 from her West Byfleet branch. Misra had pleaded guilty to false accounting — like several other sub-postmasters — but as Bates told Davey, she had done so only “because of the way Horizon and the contract are set up”. One month later, while pregnant with her second child, she was sentenced to 15 months in prison. Her sentence would not be quashed until 2021. Bates also raised the court cases of two other sub-postmasters.

When Davey replied that December, he again sought to distance himself from the controversy.

While confirming that officials were following up Bates’s concerns with the Post Office, in the case of Misra and the other two sub-postmasters, Davey said “as I made clear at the meeting” neither he nor the department could intervene in cases currently before the courts or where a legal judgment had been reached.

Dozens of sub-postmasters’ prosecutions have been quashed so far, but more than 700 were convicted

TIMES PHOTOGRAPHER RICHARD POHLE

On Horizon, he added: “POL continues to express full confidence in the integrity and robustness of the Horizon system and also categorically states that there is no remote access … which would allow accounting records to be manipulated in any way.”

Bates did not respond for eight months, as local media coverage grew and a BBC investigation picked up the cases of Misra and Jo Hamilton, who would also later have her sentence quashed. In his fifth and final letter to Davey, dated August 20, 2011, Bates said: “Needless to say that having nailed your colours to POL’s mast, from the JFSA standpoint there was little point in continuing a dialogue with you or your department at that point.”

Bates notified him that JFSA members had taken the first step in bringing legal action against the Post Office and warned that the eventual financial liability — for the taxpayer, should the Post Office lose — “has the potential of being astronomical”. He ended by stating that Davey’s decision to “ignore our offer to work with you and your department” had left the group with “no option other than to seek redress through the courts, which is now where the real truth behind Horizon will be exposed”.

Six months later, on February 3, 2012, Davey was promoted to the cabinet and became energy secretary. A Lib Dem spokesman said Davey “bitterly regrets” that the Post Office was not honest with him and he was minister before there was any external evidence gathered of faults in Horizon. “Not realising that the Post Office was lying on an industrial scale is a huge regret. Ed will fully cooperate with the inquiry,” they added.

Norman Lamb: postal affairs minister, February 2012 – September 2012

Davey was replaced by his Lib Dem colleague Norman Lamb. Unwilling to let things lie, Bates wrote to the new minister on February 25, 2012, noting that while his predecessor had taken the Post Office management “at their word”, he hoped Lamb would meet with him and reconsider working with the JFSA. Lamb accepted the invitation.

Despite Lamb’s short tenure, Bates told The Sunday Times he was the one Lib Dem minister he warmed to and who appeared “quite concerned about it”. Lamb also had prior knowledge of the scandal, having written to Davey in 2010 to raise concerns about his constituent Allison Henderson, who was one of the hundreds of sub-postmasters convicted. But he, like Bates, was told by Davey that “neither I nor the department can intervene” and that at “no time” during her case were any problems with Horizon identified.

By June 2012, the Post Office had begun to succumb to pressure from the JFSA and supportive MPs and announced that an external review would be carried out by forensic accountants at Second Sight. Bates suspects that Lamb may also have applied pressure internally, but three months later he was reshuffled.

Jo Swinson: postal affairs minister, September 2012 – May 2015

After Jo Swinson became the third postal affairs minister in under two years, Bates wrote to her on April 17, 2013, to bring her up to speed on the external review. He said that it would have already been brought to the Post Office’s attention by Second Sight that there were “systemic failures” with Horizon and yet it was “continuing with their prosecutions of sub-postmasters” despite it being “so much more obvious that they are standing on very shaky legal ground”. Urging Swinson to refocus the review on these system failures, he also asked to meet her.

On May 1, Swinson sent a 122-word response in which she sought to direct Bates elsewhere. While she “noted” the JSFA’s concerns about the “progress and direction” of the review, she said Bates should “follow these up” with James Arbuthnot, a backbench Tory MP for North East Hampshire who was assisting the group and acting in a “liaison role”. The scandal had been brought to his attention by Jo Hamilton, a constituent who had been charged. She is played in the ITV series by Monica Dolan, while Arbuthnot is played by Alex Jennings.

Jo Swinson, then postal minister, told Bates to contact a backbench Tory MP instead

GETTY

Two months later, Second Sight’s interim report was published, finding that two IT bugs in the Horizon system had caused accounting shortfalls of up to £9,000 at 76 branches. This ran contrary to the Post Office’s claims that the system was “absolutely accurate and reliable”.

The next day, July 9, 2013, Swinson gave a statement to the Commons in which she claimed that “contrary to misleading media reports, the review explicitly confirms that ‘we have so far found no evidence of system-wide problems with the Horizon software’”. She also sought to downplay the problem, describing the sub-postmasters affected as a “minute proportion” of the Post Office workforce, and reiterated that the government could not intervene in prosecutions. When grilled by MPs, Swinson added: “It is important that we do not talk the Post Office down.”

That day, Bates emailed her. She replied on July 11, 2013, recommending that he raise concerns with a working group being set up by the Post Office as part of a new complaint and mediation scheme to try to settle disputes with former and serving sub-postmasters. Over the summer, the mediation scheme launched, dozens of sub-postmasters applied to join and Bates updated Swinson on progress on August 27. On September 22, she thanked him and asked him to keep her updated.

However, by April 16, 2014, frustrations with the scheme among participants began to emerge, with Bates notifying Swinson that “unfortunately, the reality of where the scheme is at is very different” from the terms agreed with the Post Office the previous summer. He added that seven months in, not a single case had been sent for mediation and that “many observers” had again come to believe that “the only way we are really going to resolve this matter is through the media and the courts”. He told Swinson that any assistance she could give to “head off the impasse I believe we are now heading towards” would be gratefully received.

By December, patience with the Post Office had run out. A group of 140 MPs declared they had lost faith in the mediation scheme, while Arbuthnot described the Post Office’s behaviour as “duplicitous”. On December 22, Bates wrote to Swinson for a fifth time urging her to meet him and hear from those “affected, rather than from those who seem to be so desperately trying to keep the truth from you”. He also warned that in order for the scheme to be “resuscitated successfully”, the government needed to remove the Post Office from its “controlling position”.

On March 11, ahead of Second Sight publishing its final report on Horizon, the Post Office stopped its work and closed the working group, with the mediation scheme effectively collapsing. Of a total of 150 sub-postmasters who applied, only 12 cases had been mediated.

The day before, Bates emailed Swinson raising fresh concerns. When she replied on March 19, she reiterated that the scheme was “independent of government”, while at the same time defending the decision to close the working group and claiming that the Post Office’s changes were “welcome in accelerating the process”. Amid calls for the final report not to be suppressed, Swinson said that the government could neither “compel its publication nor would we do so given the confidential nature of details within it”.

Despite this, the final report did make its way into the public domain the following month — and its conclusions were damning. It described the Horizon system, in some cases, as “not fit for purpose” and warned there was a real possibility that there had been miscarriages of justice in the Post Office prosecutions. The Post Office rubbished its findings.

It is unclear whether Bates and Swinson corresponded again; he cannot remember.

Swinson defends her handling of the growing scandal and says she was misled by the Post Office: “In response to concerns raised with me by Alan Bates, his fellow sub-postmasters and their MPs, I repeatedly probed and questioned civil servants and Post Office Ltd about Horizon. They continually asserted that there was no evidence of any systemic problems with Horizon. Paula Vennells [then chief executive of Post Office Ltd] herself emphasised her commitment, and indeed Post Office Ltd’s legal duty, to disclose immediately any information that might undermine any of their prosecutions should it come to light.

“Miscarriages of justice can only be overturned by the courts themselves, and in 2015 I supported referring disputed prosecutions to the Criminal Cases Review Commission. Given what we now know from the High Court case in 2019, it is clear that Post Office Ltd misled me and other ministers on multiple occasions.

“I wholeheartedly supported calls for a public inquiry to investigate thoroughly this appalling miscarriage of justice, and I look forward to helping the Horizon inquiry in any way I can.”

Sir Vince Cable: business secretary, May 2010 – May 2015

During this five-year period, Vince Cable was Davey and Swinson’s boss at the Department for Business. In March 2015, Adrian Bailey, the chairman of the Commons business select committee, wrote to Cable expressing concerns about the mediation scheme.

Sir Vince Cable said it was “not appropriate to intervene”

PA

On March 26, Cable wrote back, repeating the same line that had been stated ad nauseam by his juniors: the scheme was independent of government, it was not appropriate to intervene and that since “these issues were first raised over two years ago … it remains the case there is no evidence of systemic problems with Horizon”.

“That conclusion has stood firm through independent investigation by Second Sight,” he added.

Less than two months later a general election was held, with David Cameron securing a narrow 12-seat majority. With it, the Lib Dems’ role as the junior coalition partner ended.

Cable said last night: “It is clear with hindsight that successive governments and ministers were misled by Post Office management who were responsible for this terrible miscarriage of justice.”

The conclusion

By the time sub-postmasters stopped being prosecuted in 2015, more than 700 had been convicted. It was not until 2019 that the Post Office’s leadership acknowledged the broader scope of the scandal. Since then, only 93 convictions have been overturned.

They were not the first or the last ministers to dither and delay, with Bates also palmed off by a number of Conservative ministers to varying degrees in the years that followed.

It took until March 2020 before Boris Johnson committed to an inquiry, and even then it took months of wrangling before it was put on a statutory footing. Bates wrote to Johnson in September that year, setting out in exhaustive detail why a judge-led probe was necessary.

Davey has said he regrets not asking tougher questions. But as the fallout from the Horizon scandal grows and another general election approaches, he may himself be facing plenty.