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Post Office bosses plotted to raid convicted sub-postmasters’ pensions to make up account shortfalls, an inquiry heard.
David Miller, the Post Office’s former chief operating officer, denied being the architect of what he described as a “horrendous” plan to target the pensions of sub-postmasters accused of theft.
The Post Office inquiry was shown minutes from a December 2004 Post Office board meeting where it said that Mr Miller was assigned the task of ensuring “that the pensions of fraudsters were targeted to help ensure the company was reimbursed”.
More than 900 sub-postmasters were wrongfully prosecuted over a 16-year period after Fujitsu’s faulty Horizon software incorrectly recorded shortfalls on their accounts.
Yet when questioned on the notes on Tuesday, Mr Miller denied proposing the measure.
He told the inquiry: “I don’t recall this in any detail at all. But I certainly didn’t propose that.”
Mr Miller added: “Seeing it here, it sounds horrendous. Sorry, it sounds severe in terms of its intention.”
He also denied describing Fujitsu as a “bayonet up [his] posterior”.
Another document shown to the inquiry read: “The leaders at Post Office Counters Ltd (POCL) felt they had been shafted by a Government/Pathway stitch-up.”
The text continued: “Dave Miller, the MD of Post Office Network, said at the time: ‘I have the same feelings about Pathway as I would for the man who had just shoved 15 inches of bayonet up my posterior’.
“No statement could more adequately express the attitude of Post Office towards Pathway.”
When asked by counsel to the inquiry Emma Price if he recalled making such a comment, Mr Miller, who left the Post Office when he retired in 2006, said: “Absolutely not.”
The former chief operating officer said there was a “resentment” towards the company, later known as Fujitsu.
The 74-year-old’s evidence was followed by that of David Mills, the former chief executive who held the job from April 2002 until the end of 2005.
Labour instructed Post Office to pay ‘generous bonuses’
Mr Mills, who previously had a career in banking before joining the organisation, told the inquiry that Sir Tony Blair’s Labour government had instructed the Post Office to pay its bosses “generous” bonuses. At the time, Patricia Hewitt was secretary of state for trade and industry.
Asked about his remuneration as chief executive, Mr Mills said: “First of all it was fixed, and then, I recall, the secretary of state made it extremely clear to Allan Leighton [chairman of Royal Mail Group] that she expected the senior executive of the entire group to have remuneration that was performance-based, and that the targets for that performance should be stretching, and that the rewards for that stretching success were not to be miserly, they should be generous.”
Mr Mills also told the inquiry that when he was first appointed, the Post Office was losing £1 million every day.
“It didn’t take me long to realise that we had a burning ship, it was losing a million pounds every single day it operated,” he said.
On Wednesday the Post Office inquiry will hear from Mr Leighton, the ex-chairman and non-executive director of Post Office Ltd.
The Telegraph has contacted Labour and the NHS Trust which Ms Hewitt is now chairman of for a response.
Last week, the inquiry heard how former sub-postmaster Alan Bates, who led 555 colleagues to a High Court victory against the Post Office in 2019, wrote to Mr Leighton about his own case in August 2003 – a few months before he [Mr Bates] had his contract terminated.
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