Post office scandal exposes rotten rigged system

The Post Office Horizon scandal has burst into the spotlight, propelled by the four-part ITV drama ‘Mr Bates vs the Post Office’. The series resonates because it chimes with the widespread sense that the system is rigged, and that there is one rule for them and another for us.

It follows the Covid Partygate, PPE contracts, MPs’ expenses and numerous other scandals, and is against the background of an ongoing cost-of-living crisis. It has provoked huge anger. In one way or another, almost all levels of government, and all capitalist establishment parties are embroiled.

“Of course we respond to public pressure”, Kevin Hollinrake, the Tory minister responsible for the Post Office, was forced to concede, after it was announced that all criminal convictions against subposties would be expunged – an unprecedented step.

“One would start getting anxious if it became a habit”, said former Tory attorney-general Dominic Grieve. Anxious no doubt because of the festering mountain of injustices – legal yes, but social and economic too – faced by working-class people. 

If the allegedly mighty ‘weight of the law’ can be so rapidly overturned by parliament, what excuse is there, for example, for Keir Starmer not to pledge that in office his government would reverse and refund any legal measures or fines made against trade unions and their members under the Tories’ new anti-union minimum service levels act?

Imagine what other ‘unprecedented’ steps could be taken if mass ‘public pressure’ had an organised expression.

Below we print a review, written by Bill Mullins, of ’The Great Post Office Scandal’, first published in our sister publication Socialism Today in March 2022.

Just before the start of the new millennium the Post Office, or to give it its full title, Post Office Limited (POL), introduced a new computer system for all its sub-post offices throughout the country. The system, known as the Horizon system, linked up 40,000 terminals at 18,000 sub-post offices with head office in London and the IT company Fujitsu in Bracknell.

As the book makes clear, despite all the lies, arrogance and bluster of the Post Office and Fujitsu bosses, the system was fatally flawed. As the author Nick Wallis spells out in great detail, this led to a human tragedy of massive proportions for hundreds (if not thousands, as evidence continues to come out) of subpostmasters.

Hundreds of court prosecutions took place involving the same postmasters, dozens of whom went to jail. Many lost their homes as they were effectively bankrupted; nearly all lost thousands of pounds and were left in debt. A number of suicides took place as well, as many of the sub-postmasters (including some directly employed members of staff in Crown Post Offices) ended up with major mental health problems. There were even some whose wellbeing was so badly affected by what happened to them that they died of their ill-health before the whole scandal was exposed in the courts, in parliament, and in the media.

On top of all this, the Post Office has already spent over £100 million in legal fees as it attempted to justify what it did during its cover up of the scandal. Nick estimates that the final cost will be something like £500 million after the hundreds of subpostmasters take the company to court for the damages it has caused them.

That means that because POL is still a government-owned company (unlike Royal Mail which was privatised some time ago) the taxpayers will pick up the final bill. And yet not a single boss either from the Post Office or Fujitsu lost their job, never mind being taken to court for their criminal behaviour during the cover-up.

Probably the one figure that is most culpable is Paula Vennells, the chief executive officer (CEO) of Post Office Ltd, who was guilty by her absolute backing of her underlings when they persecuted and wrecked the lives of the subpostmasters who were completely innocent of any wrong doing.

Subpostmaster federation

The author goes into chapter and verse of who the guilty parties were (and are to this day) from the so-called Post Office investigators (who acted like a Stasi and bullied and blackmailed the subbies into sometimes false confessions), to the so-called union of sub-postmasters, the National Federation of SubPostmasters (NFSP), who put to shame the very notion of what a trade union should be all about. And then there are the government ministers responsible for the Post Office – there were ten in ten years, from Lib Dems, the Tory Party, and New Labour – who consistently backed up the Post Office throughout most of the period the scandal was happening.

The author, who was a local BBC journalist, did not set out to expose the POL shenanigans, and only stumbled upon the story through a conversation with a taxi driver whose wife was one of those imprisoned. Indeed, the individual subpostmasters themselves, when their accounts were audited and a shortfall in money was supposed to have been uncovered, were always told that they were the only ones it was happening to. After all it couldn’t have been the Horizon computers that were responsible. It was declared for years that the system was ‘robust’ and that any losses were down to their own dishonesty or incompetence.

Many examples are given of individual subpostmasters who found that their Horizon-linked terminal was showing up losses of sometimes tens of thousands of pounds. What was the subbie to do? Some of them tried to ring the Post Office helpline and were told ‘not to worry about it, it will fix itself’, only to be accused later of fraud or theft. Many of them tried to make up the book losses out of their own money by various ways. But they were never able to and ended up being prosecuted by the internal investigation unit of POL.

The Post Office was one of the only institutions that could take out prosecutions against its own employees or agents, in the case of the subbies. Most employers going down that road have to involve the police and the Crown Prosecution Service.

Between 2000 and 2005 the Post Office took out over 240 criminal prosecutions against the subpostmasters and a few Crown Office directly employed counter staff, compared to 67 in the previous years before the installation of Horizon. Later on in the book the author quotes the Post Office as saying in court that another 2,400 cases were pending.

Horizon was one of the first private finance initiatives (PFIs) proposed by the Tory government of John Major in the 1990s. International Computers Limited (ICL), which later became part of Fujitsu, won the contract (out of eight companies bidding), because it made the cheapest offer. 

With 40,000 terminals, in what was then 20,000 local sub-post offices involving 67,000 people (subbies and counter staff), the system was the biggest and most complex non-military computer network in Europe.

Originally the Department of Social Security’s Benefit Agency was going to be part of it, given the huge number of pensions and other benefits that are paid out every week in your local sub-post office. Luckily enough the DSS (which was merged into the Department for Work and Pensions in 2001) pulled out, otherwise who knows what would have happened to the pensions of millions of people.

The author pays special attention to the response of the subbie’s so-called union, the NFSP, when individual postmasters raised their concerns. In a word, the NFSP was not interested and, further, they gave full public support to the Horizon system from the get go, calling it ‘robust’ and the best thing that ever happened to the Post Office.

Only later in the courts was it brought out that the NFSP was wholly financed by the Post Office. Written into its financial arrangements with POL was the understanding that the NFSP would always support the Post Office whatever it did. The extent of this cosy arrangement was illustrated when it was revealed that the general secretary of the NFSP when Horizon was first installed was the father of the Post Office’s company secretary, who was on the Post Office board of directors.

When the only NFSP executive member to take the scandal seriously raised the issue on the executive he got no support whatsoever from the rest of the committee. Indeed, in the long-drawn-out court proceedings (the book goes into great detail about the various trials and court hearings that took place) the more recent general secretary of the NFSP, George Thompson, was seen as the best defender of the Post Office and its Horizon system and was much quoted by the POL bosses.

The Communications Workers Union (CWU), the main union in the Post Office and Royal Mail, has now launched a campaign to recruit subpostmasters. The lead officer for this is the ex-NFSP executive member Mark Baker.

Nick Wallis explains a little about the outlook of subpostmasters early on in his book, which he characterises correctly as having a “small businessman mentality”. You get throughout it the heartrending personal stories of subbies caught up in a deeply flawed system, with most of them (some of whom employed their own counter staff) unable to believe how they were being treated by the Post Office.

They had considered themselves as partners with POL in trying to develop a successful business. Many of them were from the older generation who, after a lifetime of other work and employers, saw that being a subpostmaster gave them a certain status in their local communities. But with the scandal you could say that the veil has dropped from their eyes.

Many parts of the book are necessarily devoted to explaining some of the technical reasons for what was wrong with the Horizon system and how both the Post Office and Fujitsu were complicit in the cover-up, attempting to hide the problem even if it meant many people suffered as a result. 

At one stage, the author recounts how an executive member of the NFSP went on an official visit to the HQ of Fujitsu in Bracknell and was astonished to accidentally witness a demonstration of how the company, from a basement in the building, could alter the accounts remotely of local subpostmasters, without the knowledge of the subbies. It was only in 2019 that the Post Office was forced in court to admit that this was happening and had taken place regularly over the previous decades. A whistle blower who had worked at Fujitsu, Richard Roll, went on a BBC Panorama programme in 2015 after he had left the company and explained this was happening.

Paula Vennells

Special outrage is reserved for Paula Vennells, the CEO of the Post Office from 2011, who was fully complicit in the cover-up. What really grates about her role is that when she took over as CEO she declared that it was her ‘Christian values’ that drove her every day in her actions as the Post Office boss.

‘The Reverend Vennells’ was a non-stipendiary vicar of the Church of England. She was given a mission not to practice ‘Christian values’ by the then prime minster David Cameron but to make the Post Office ‘operationally profitable’. One of the ways she did this, according to the author, was to “cancel the payment of subpostmasters’ salaries”. This immediately impoverished thousands of them so that they had to rely more and more on the retail side of the business.

Such was the stink created by the scandal that Vennells left her Post Office job in 2019 but was then awarded a CBE in the same year [which she has since handed back] and given a number of lucrative seats on various company boards, as well being the chair of a large NHS trust. Many of the subbies and some MPs were outraged to find this out and forced her removal from these posts. Nick Wallis describes how he unsuccessfully attempted to get interviews with her, at one time turning up on the doorstep of her Oxford mansion.

The book’s retelling of the court trials and hearings are some of the best I have ever read and the author should be especially congratulated for them. The book ends with a number of sub-postmasters’ criminal convictions being overturned on appeal and them being declared innocent.

  • The Great Post Office Scandal, published by Bath Publishing Ltd, 2021, £25