Ed Davey says Post Office lied to him and apologises to Alan Bates

The Liberal Democrat leader, Ed Davey, has accused the Post Office of lying to him, as he apologised to Sir Alan Bates for turning down a meeting as the former post office operator tried to expose the scandal over the Horizon computer system.

Davey, who served as postal affairs minister between 2010 and 2012, was giving evidence at the inquiry into the wrongful prosecution of hundreds of post office operators on the basis of flawed accounting data from Horizon. It is often described as one of the greatest miscarriages of justice in British history .

“I now know I was being lied to,” Davey told the inquiry on Thursday. “I’ve followed this inquiry and it’s pretty clear that what they told my officials was not true.”

Davey named the former Post Office chief executive Paula Vennells and former managing director David Smith as some of the “people passing information which was untrue”, although he stopped short of accusing them personally of lying. “Someone senior” in the Post Office must have known the truth, he said.

The Post Office Horizon inquiry has heard testimony from hundreds of witnesses over more than two years, ranging from affected post office operators to executives and board members at the state-owned body, as well as the politicians who ultimately controlled it.

Davey and Pat McFadden – now a member of the cabinet and a predecessor to Davey as postal minister under the previous Labour government – both said that ministers were reliant on accurate and truthful briefings from civil servants. Both said they would have acted differently in their dealings with the Post Office had they known the truth.

They appeared before the inquiry after successful general election campaigns. Davey led the Liberal Democrats to their record number of seats , while McFadden masterminded Keir Starmer’s election victory and is now a senior member of the cabinet, as chancellor of the duchy of Lancaster.

Both also offered ideas for the future of the Post Office. In written evidence Davey said he favoured mutualisation of the business, meaning it would be owned by employees or customers rather than the state. He also favoured a “duty of candour” for public officials.

McFadden asked the inquiry to consider whether it should recommend creating an inspectorate to oversee bodies such as the Post Office, which are owned by the government but run at arm’s length.

Davey also faced questions – at times uncomfortable – about his actions as the effects of the scandal were becoming clear. On the day he was appointed as postal affairs minister in May 2010, he received a letter from Bates asking for a meeting to discuss the wrongful prosecutions.

Bates, whose story was dramatised this year in the ITV drama Mr Bates vs the Post Office , wrote that the Post Office was acting as “judge, jury and executioner” for post office operators who it was prosecuting – wrongfully – for fraud because their accounts did not match cash balances. Davey’s response was: “I do not believe that a meeting would serve any useful purpose.”

Davey told the inquiry that he apologised to Bates for his “terse” response, said that he did not remember reading the first letter, and said that at that time he relied on his officials to make judgments as to whether it was necessary to meet. They eventually met in October 2010.

Davey and McFadden both told the inquiry that they were reliant on the accuracy of the information being passed to them from civil servants and the Post Office itself when responding to those people with concerns. That included then chancellor George Osborne and Priti Patel, who would later become home secretary, among several MPs whose constituents had been targeted for prosecution.

The post office operators were often forced to pay thousands of pounds from their own pockets to make up supposed shortfalls.

Some of the first warnings of problems with the Horizon system came in 2009 from MPs and the Computer Weekly magazine . McFadden’s department asked the Post Office to respond to those concerns, but he told the inquiry that he now wishes he had questioned the Post Office more over its “emphatic” defence of its flawed accounting software. He said “wrong” information on the Horizon system had had “terrible human consequences”.

“The Post Office kept insisting that the system was robust and fit for purpose,” McFadden said. “If you ask me over the whole story here, of course I wish I had done more to question these responses. I believe if I had, I would have got the same response from the Post Office.”