qualified internal and external, qualified lawyers, legal advice, the general counsel, the company secretary, and of course any people looking at the issues that arose.— of course any people looking at the issues that arose. what about things like ensuring — issues that arose. what about things like ensuring there _ issues that arose. what about things like ensuring there is _ issues that arose. what about things like ensuring there is a _ issues that arose. what about things like ensuring there is a separation i like ensuring there is a separation of functions? asi as i said, the legal process is not my area of expertise.— as i said, the legal process is not my area of expertise. what about thin . s like my area of expertise. what about things like the _ my area of expertise. what about things like the independence - my area of expertise. what about things like the independence of i things like the independence of decision—makers? things like the independence of decision-makers?— things like the independence of decision-makers? yes, i would have thou~ht decision-makers? yes, i would have thought so. — decision-makers? yes, i would have thought so. yes- _ decision-makers? yes, i would have thought so, yes. what _ decision-makers? yes, i would have thought so, yes. what about - decision-makers? yes, i would have thought so, yes. what about thingsl thought so, yes. what about things such as intrusive _ thought so, yes. what about things such as intrusive supervision - thought so, yes. what about things such as intrusive supervision and i such as intrusive supervision and regular— such as intrusive supervision and regular audits and reviews of the way in _ regular audits and reviews of the way in which the company's conducting its prosecutorial functions?— conducting its prosecutorial functions?- what - conducting its prosecutorial functions? yes. what about special attention being _ functions? 1313 what about special attention being paid to functions? 13:3 what about special attention being paid to who functions? iez3 what about special attention being paid to who you are recruiting _ attention being paid to who you are recruiting to investigate alleged crimes— recruiting to investigate alleged crimes against the male? yes, i

would have _ crimes against the male? yes, i would have thought _ crimes against the male? yes, i would have thought so. - crimes against the male? yes, i would have thought so. i - crimes against the male? yes, i would have thought so. i would| crimes against the male? yes, i - would have thought so. i would have thought all the people in the team were proper qualified lawyers. it is the truth of _ were proper qualified lawyers. it is the truth of the matter that you in your position did not have any developed understanding of the extent— developed understanding of the extent to which royal mail prosecuted or the way in which the thinge— prosecuted or the way in which the things that — prosecuted or the way in which the things that i have just mentioned were _ things that i have just mentioned were or— things that i have just mentioned were or were not carried into effect? — were or were not carried into effect? �* . .. were or were not carried into effect? �* , . ., were or were not carried into effect? ~ , . ., ., effect? as i have said earlier, i am not a lawyer. _ effect? as i have said earlier, i am not a lawyer. i _ effect? as i have said earlier, i am not a lawyer, i would _ effect? as i have said earlier, i am not a lawyer, i would not- effect? as i have said earlier, i am not a lawyer, i would not claim - effect? as i have said earlier, i am| not a lawyer, i would not claim that thatis not a lawyer, i would not claim that that is my area of expertise. can we look, please, at r n g 708, please? _ this is the following year. you can say that _ this is the following year. you can

say that it's — this is the following year. you can say that it's the 24th of may, 2004 and it— say that it's the 24th of may, 2004 and it is_ say that it's the 24th of may, 2004 and it is a — say that it's the 24th of may, 2004 and it is a minute of the audit and risk committee of royal mail holdings. you are shown in attendance, third down. yes. can we to attendance, third down. yes. can we no to -ae~ attendance, third down. yes. can we go to page six. _ attendance, third down. iez3 can we go to page six, please? under the heading, protecting underthe heading, protecting royal mail assets. mr wilson director of security attended for this item, committee noted _ attended for this item, committee noted royal mail was inherently vulnerable through fraud or other events _ vulnerable through fraud or other events. the committee noted the key activity— events. the committee noted the key activity of— events. the committee noted the key activity of the business in protecting royal mail's assets and pipelines, including increased focus on fraud _ pipelines, including increased focus on fraud investigations, separate discussions had taken place and action— discussions had taken place and action plans had been developed to

address— action plans had been developed to address the issues highlighted recently in despatches, mentioned a moment— recently in despatches, mentioned a moment ago. the company made 299 prosecutions last year. john neal asked _ prosecutions last year. john neal asked if— prosecutions last year. john neal asked if the policy on prosecutions was clear— asked if the policy on prosecutions was clear and what level of resources would be required to improve — resources would be required to improve the prosecution rate. mr wilson— improve the prosecution rate. mr wilson did — improve the prosecution rate. mr wilson did not feel an increase in resource — wilson did not feel an increase in resource was necessary or effective. there _ resource was necessary or effective. there was _ resource was necessary or effective. there was a — resource was necessary or effective. there was a problem in recruiting people _ there was a problem in recruiting people where criminal activity was at higher— people where criminal activity was at higher levels. this is a discussion about protecting royal mail assets and prosecutions. yes. there is a note _ mail assets and prosecutions. yes. there is a note of _ mail assets and prosecutions. yes. there is a note of the _ mail assets and prosecutions. iez3 there is a note of the number of prosecutions made in the previous year~ _ prosecutions made in the previous year~ again, — prosecutions made in the previous year. again, in yourview, does this relate _ year. again, in yourview, does this relate and — year. again, in yourview, does this relate and only relate to royal mail prosecutions and not include within the figure _ prosecutions and not include within the figure post office? | prosecutions and not include within the figure post office?— the figure post office? i think so, es. wh the figure post office? i think so, yes why were — the figure post office? i think so, yes. why were the _ the figure post office? i think so, yes. why were the post _ the figure post office? i think so, yes. why were the post office -

yes. why were the post office prosecutions _ yes. why were the post office prosecutions and _ yes. why were the post office prosecutions and conduct - yes. why were the post office prosecutions and conduct of. yes. why were the post office - prosecutions and conduct of those not being — prosecutions and conduct of those not being sent up to the royal mail hoard, _ not being sent up to the royal mail board, which you have said already, but also _ board, which you have said already, but also to — board, which you have said already, but also to this audit and risk committee?— but also to this audit and risk committee? the headline says protecting _ committee? the headline says protecting royal— committee? the headline says protecting royal mail- committee? the headline says protecting royal mail assets, i committee? the headline saysl protecting royal mail assets, so committee? the headline says - protecting royal mail assets, so not knowing what the conversation was that a previous meeting, but it could be that this is a follow—up to their despatches thing. one other thing we did after that was managed to get agreement from the government to get agreement from the government to allow us to check the criminal records of anyone that was joining royal mail because we had an issue with bringing people in who were there to do us harm, particularly on there to do us harm, particularly on the casual side. i should stress by the casual side. i should stress by the way, that makes it sound like there were lots of people at royal mail who were bad people. actually, there were lots of wonderful people in that organisation and the vast majority were terrific people but clearly we had a problem here and we had to ensure that those people who were joining the organisation were ones that we had done the proper

checks on as a way of cutting down on the level of crime that was being committed on the company, and therefore the citizens of the uk. mr; therefore the citizens of the uk. my question was, why have we seen discussion— question was, why have we seen discussion in the main board and in this committee of the numbers of prosecutions, you say brought by royal— prosecutions, you say brought by royal mail, and about prosecutorial policy _ royal mail, and about prosecutorial policy here being reference to the committee but on your account, none of this— committee but on your account, none of this relates to the post office? no. ~ , .. . �* of this relates to the post office? no. ~ , . , �* ., of this relates to the post office? no. , �* ., , of this relates to the post office? no. , ., _ no. why wasn't that considered by the committee _ no. why wasn't that considered by the committee or— no. why wasn't that considered by the committee or main _ no. why wasn't that considered by the committee or main board - no. why wasn't that considered by the committee or main board of i no. why wasn't that considered by i the committee or main board of royal mail? _ the committee or main board of royal mail? i _ the committee or main board of royal mail? .. �* the committee or main board of royal mail? ., �* ~ .. the committee or main board of royal mail? ~ ., �* , ., mail? i don't know. because we had one mail? i don't know. because we had gone through _ mail? i don't know. because we had gone through that _ mail? i don't know. because we had gone through that very _ mail? i don't know. because we had gone through that very difficult - mail? i don't know. because we had gone through that very difficult and | gone through that very difficult and bad experience at royal mail, i think this is part of what i mentioned earlier, about being very transparent about the issues that we were trying to deal with on the letter is a side of the business. so this would have been brought forward

by the letters team to try and create that understanding of what we were dealing with. clearly, for whatever reason, and i don't recall why that same drive wasn't there from the post office team. can we lookthirdly. _ from the post office team. can we look thirdly, we _ from the post office team. can we look thirdly, we have _ from the post office team. can we look thirdly, we have looked - from the post office team. can we look thirdly, we have looked at - from the post office team. can we | look thirdly, we have looked at the board _ look thirdly, we have looked at the board and — look thirdly, we have looked at the board and looked at the committee, can i look— board and looked at the committee, can i look at— board and looked at the committee, can i look at a third potential source — can i look at a third potential source of— can i look at a third potential source of oversight, the management boardi _ source of oversight, the management board, please? are injury 6031. —— rmg _ board, please? are injury 6031. —— rmg 6031— and if we just blow up the top part, thank— and if we just blow up the top part, thank you — and if we just blow up the top part, thank you. this is the royal mail management board, which sat essentially underneath the royal mail holdings plc main board, as i call it. _ mail holdings plc main board, as i call it. is— mail holdings plc main board, as i call it, is that right? that mail holdings plc main board, as i call it, is that right?— call it, is that right? that is correct. _ call it, is that right? that is

correct. yes- _ call it, is that right? that is correct, yes. it _ call it, is that right? that is correct, yes. it is _ call it, is that right? that is correct, yes. it is for - call it, is that right? that is i correct, yes. it is for tuesday call it, is that right? that is - correct, yes. it is for tuesday 24th of january. — correct, yes. it is for tuesday 24th ofjanuary. 2004. _ correct, yes. it is for tuesday 24th of january, 2004, the _ correct, yes. it is for tuesday 24th ofjanuary, 2004, the minute, - correct, yes. it is for tuesday 24th j ofjanuary, 2004, the minute, and you are _ ofjanuary, 2004, the minute, and you are present and shown as a person— you are present and shown as a person present because you are a member— person present because you are a member of— person present because you are a member of this board.— person present because you are a i member of this board.- code member of this board. correct. code we look please _ member of this board. correct. code we look please at _ member of this board. correct. code we look please at page _ member of this board. correct. code we look please at page five? - and scroll down to prosecution policy, — and scroll down to prosecution policy, i — and scroll down to prosecution policy, i think we need the title of the paper~ — policy, i think we need the title of the paper. the management board received _ the paper. the management board received a — the paper. the management board received a paper which updated the board _ received a paper which updated the board on— received a paper which updated the board on current levels of legal expenditure and seeking endorsement for a change in priorities and consider— for a change in priorities and consider which activities might be ceased _ consider which activities might be ceased or— consider which activities might be ceased or reduced without a significant risk to the business in order— significant risk to the business in order to — significant risk to the business in order to facilitate further headcount reductions. the board noted _ headcount reductions. the board

noted a — headcount reductions. the board noted a reduction in legal services and increasing external legal costs has been _ and increasing external legal costs has been carefully managed and endorsed — has been carefully managed and endorsed the privatisation of the resource — endorsed the privatisation of the resource used in criminal prosecutions by the company. the company's — prosecutions by the company. the company's public position of having a strict _ company's public position of having a strict policy towards offenders would _ a strict policy towards offenders would not be altered by this. mr evans _ would not be altered by this. mr evans would investigate the possibility of increasing police involvement and report back to the board _ involvement and report back to the board on— involvement and report back to the board on these investigations. two action— board on these investigations. two action points are noted. would you say this— action points are noted. would you say this is— action points are noted. would you say this is again about and only about— say this is again about and only about royal mail prosecutions? | about royal mail prosecutions? believe about royal mail prosecutions? i believe so, yes, for two reasons. you will have noticed on a lot of the... hopefully all of the minutes that you see, we had a policy of asking the team responsible to come to a meeting to present things. you will notice from the front page that you put up, there is no one from the post office... you put up, there is no one from the post office- - -— post office... back to page one, lease.

post office... back to page one, please- and _ post office... back to page one, please. and if _ post office... back to page one, please. and if we _ post office... back to page one, please. and if we scroll - post office... back to page one, please. and if we scroll down, i post office... back to page one, | please. and if we scroll down, we will see _ please. and if we scroll down, we will see the — please. and if we scroll down, we will see the others attending, which is i think— will see the others attending, which is i think where they would appear if is i think where they would appear if they— is i think where they would appear if they were there.— is i think where they would appear if they were there. yes. thank you. and ou if they were there. yes. thank you. and you are — if they were there. i;e:3 thank you. and you are making the point there is and you are making the point there is no _ and you are making the point there is no post _ and you are making the point there is no post office... and you are making the point there is no post office. . ._ is no post office... there is no post office _ is no post office... there is no post office there _ is no post office... there is no post office there and - is no post office... there is no post office there and david i is no post office... there is no l post office there and david mills did notjoin until quite a bit after that topic and i don't think there is any way we would have taken that topic if it involved the post office without him there and without any representative of the post office there. , ., ., there. does that, that can come down... there. does that, that can come down- -- to _ there. does that, that can come down... to the _ there. does that, that can come down... to the best _ there. does that, that can come down. .. to the best of- there. does that, that can come down... to the best of my - there. does that, that can come - down... to the best of my memory. does that again _ down... to the best of my memory. does that again reflect _ down... to the best of my memory. does that again reflect the - down... to the best of my memory. does that again reflect the fact - does that again reflect the fact thatiust — does that again reflect the fact thatjust like the mainboard, just like the _ thatjust like the mainboard, just like the audit and risk committee, the management board did not oversee or supervise _ the management board did not oversee or supervise in any way the conduct of prosecutions by post office limited? _ of prosecutions by post office limited? ..

of prosecutions by post office limited? no. even though such limited? even though such prosecutions limited? tip. even though such prosecutions were being conducted by royal mail— prosecutions were being conducted by royal mail lawyers? yes. 0n on behalf of the post office. and again, i should say that is not my memory but obviously i'm completely taking what you are saying is red. —— as read. taking what you are saying is red. -- as read-— -- as read. why was this prosecutorial _ -- as read. why was this prosecutorial activity - -- as read. why was this prosecutorial activity of l -- as read. why was this i prosecutorial activity of the -- as read. why was this - prosecutorial activity of the post office _ prosecutorial activity of the post office not subject of any scrutiny in office not subject of any scrutiny in or— office not subject of any scrutiny in or by— office not subject of any scrutiny in or by the three mechanisms that we have _ in or by the three mechanisms that we have just looked at? board, risk committee — we have just looked at? board, risk committee or management board? | we have just looked at? board, risk committee or management board? i am assumin: committee or management board? i am assuming that's — committee or management board? i —n assuming that's because the post office, if you remember i think there was a question which is somewhere in my statement, around who set the agendas for the meetings. i think as i mentioned earlier, at royal mail we were really pushing things forward and

trying to improve things and deal with things very openly and transparently. if call at that stage would be asked through chairman or chief executive if they wanted any items raised at the holdings board, they would put those forward. obviously mr leighton was also on that board. i guess that would be because they didn't volunteer this issue as being one that they wanted to be discussed in that forum. at the management board, that was really about where the two companies came together in a sort of trading and commercial agreement, as i said earlier. ~ :. ., ., and commercial agreement, as i said earlier. ~ ., ., ., ., earlier. would another way of describing — earlier. would another way of describing it _ earlier. would another way of describing it be _ earlier. would another way of describing it be that - earlier. would another way of describing it be that you - earlier. would another way of describing it be that you let i earlier. would another way of - describing it be that you let them -et describing it be that you let them get on _ describing it be that you let them get on with it? | describing it be that you let them get on with it?— describing it be that you let them get on with it? i wouldn't have put it that way — get on with it? i wouldn't have put it that way but _ get on with it? i wouldn't have put it that way but i _ get on with it? i wouldn't have put it that way but i understand - get on with it? i wouldn't have put it that way but i understand why i get on with it? i wouldn't have put i it that way but i understand why you might take that reference. do you ever remember receiving reports — do you ever remember receiving reports about the conduct of prosecutions by royal mail lawyers

on behalf _ prosecutions by royal mail lawyers on behalf of the post office? no, | on behalf of the post office? no, i don't. do you think looking back with hindsight this is an activity that ought — hindsight this is an activity that ought to— hindsight this is an activity that ought to have been the subject of oversight— ought to have been the subject of oversight and supervision by one or more _ oversight and supervision by one or more of— oversight and supervision by one or more of the — oversight and supervision by one or more of the three boards or committees that i have just mentioned? with the benefit of hindsight, yes, i do. to what extent is that issue that we have identified the product of the structural— have identified the product of the structural difficulties that you identified in paragraph 11 of your witness — identified in paragraph 11 of your witness statement? as _ witness statement? as i _ witness statement? as i said, again, looking back with hindsight, i think that was one of my concerns, that in this structure, it allowed things to potentially appear in the cracks, for want of a better phrase, because i cannot think of a better one right now. what information or the royal mail

board, _ what information or the royal mail board, its— what information or the royal mail board, its management board or its risk committee have received from post office limited about the conduct — post office limited about the conduct of prosecutions? probably similar to what we have seen on letters, which is an explanation of what was going on and to what degree. we have seen that in one of the minutes— we have seen that in one of the minutes that the board was exercising some control, was either turning _ exercising some control, was either turning the — exercising some control, was either turning the dial up or down in the ement— turning the dial up or down in the extent to — turning the dial up or down in the extent to which an active prosecution policy should be pursued _ prosecution policy should be pursued. would that be a function of royal— pursued. would that be a function of royal mail— pursued. would that be a function of royal mail group board over the post office, _ royal mail group board over the post office, that it ought to have performed? again, ithink performed? again, i think the level of awareness of this, because of the lack of communication from the post office, was probably very low. where does the responsibility for their lack— where does the responsibility for their lack of communication from the post office _ their lack of communication from the

post office fall? i think you would have to say with the post office chief executive and chairman. that's... that's. .. that assumes, i beg your pardon- -- — that's. .. that assumes, i beg your pardon... that _ that's. .. that assumes, i beg your pardon... that assumes _ that's. .. that assumes, i beg your pardon... that assumes they - that's. .. that assumes, i beg your. pardon... that assumes they knew? exactly that — pardon... that assumes they knew? exactly that and _ pardon... that assumes they knew? exactly that and obviously _ pardon... that assumes they knew? exactly that and obviously i - pardon... that assumes they knew? exactly that and obviously i don't i exactly that and obviously i don't know whether they did or not. my assumption is that they didn't but i guess that is one of the rolls of the inquiry, to figure that out. figs the inquiry, to figure that out. as well as responsibility potentially resting — well as responsibility potentially resting with post offices chief executive and chairman, does responsibility not to rest with royal— responsibility not to rest with royal mail for designing a structure

in royal mail for designing a structure in which _ royal mail for designing a structure in which none of its systems of oversight— in which none of its systems of oversight picked up that this prosecutorial activity was even going — prosecutorial activity was even going on— prosecutorial activity was even going on on your account? | prosecutorial activity was even going on on your account? i think it is a matter— going on on your account? i think it is a matter of— going on on your account? i think it is a matter of real i going on on your account? i think it is a matter of real regret i going on on your account? i think it is a matter of real regret that i going on on your account? i think it is a matter of real regret that all i is a matter of real regret that all of those checks and balances, the governance systems in both companies failed, as well as internal and external audit, all the checks and balances put in failed to surface this issue out of the post office to a wider set of people.— this issue out of the post office to a wider set of people. what was the level of your — a wider set of people. what was the level of your contact i a wider set of people. what was the level of your contact with i a wider set of people. what was the level of your contact with the i a wider set of people. what was the level of your contact with the royall level of your contact with the royal mail's _ level of your contact with the royal mail's general counsel?— mail's general counsel? mostly throu . h mail's general counsel? mostly through the — mail's general counsel? mostly through the company i mail's general counsel? mostly through the company secretaryj mail's general counsel? mostly i through the company secretary but from time to time, separately. did ou ever from time to time, separately. did you ever explore with the general counsel— you ever explore with the general counsel how he or she, the extent to which _ counsel how he or she, the extent to which he _ counsel how he or she, the extent to which he or— counsel how he or she, the extent to which he or she had involvement in the prosecutorial activities of the post office?

i did not, no.