Labour told Post Office to pay bosses generous bonuses

Sir Tony Blair’s Labour government told the Post Office to pay its bosses “generous” bonuses, the inquiry has heard.

David Mills, its chief executive from 2002 to 2005, said Royal Mail Group, which owned the Post Office, was ordered to do so by Patricia Hewitt, the then Secretary of State for Trade and Industry.

Asked about his remuneration in the role, 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 earlier told the inquiry that the Post office was losing £1 million every day when he first became chief executive.

“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.

04:49 PM BST

That’s all for today

Thank you for following the Telegraph’s live coverage of the Post Office inquiry.

04:35 PM BST

Inquiry concludes for the day

The inquiry has now concluded for the day and will resume at 10am on Wednesday.

04:35 PM BST

Post Office would have been in ‘crisis mode’ if forced to reconsider Horizon

David Mills said the Post Office would have been in “crisis mode” if it had been forced to reconsider its Horizon IT system.

Tim Moloney KC, who represents former Post Office staff affected by the scandal, asked Mr Mills: “If the Post Office had been forced to go back to the drawing board on its online accounting system, the business was in real trouble wasn’t it?”

Mr Mills replied: “Sorry?”

Mr Moloney clarified: “The business was in real trouble?”

Mr Mills said: “Definitely, crisis mode it would have been in.”

04:29 PM BST

Post Office had to ‘ring BT’s neck’ to get Horizon fixes, says Mills

David Mills is now being questioned on an article he wrote in March 2005for a sub-postmasters’ magazine about the Post Office becoming quicker at fixing hardware faults in the Horizon network.

“An amazing number of the faults that sub-postmasters were recording were, first of all, because they had bad telephone lines that didn’t stay up all the time and that hiccuped,” he said.

“To get them fixed you actually needed a man and a van and a shovel, and men in vans and shovels don’t turn up just like that.

“You have to put your hand up and say to BT, ‘Would you please come?’ and in three days’ times hopefully they turn up. So getting our hands round BT’s neck and trying to ring it was part of the problem.

“Also, the kit that was put into post offices was not one piece of kit, it was a connection of pieces of kit, and pieces of kit don’t always work and the connections don’t always work. And sub-postmasters pull them out and don’t know where to put them back in.

“There was a whole variety of things that were nothing whatsoever to do with the software, these were real, practical, day-to-day hardware problems that we weren’t getting to fast enough because we had 17,500 branches that were phoning up and we had to get round to.”

04:20 PM BST

Mills ‘very surprised’ non-disclosure of facts could ‘harm’ business

David Mills has said he is “very surprised” that the Royal Mail Group’s legal department had not come to terms that failure to disclose facts to prosecuted sub-postmasters “could harm” the business.

When asked if he identified prosecutions as a risk to the business, Mr Mills said he didn’t: “Because I was too busy doing other things but I should have done.”

He added later: “I’m very surprised in a sense that the people with the investigations – especially those people in group legal department – had not come to terms with the idea that these things that were happening could harm us.”

Counsel to the inquiry Sam Stevens asked: “What things were happening?”

Mr Mills: “Well, the non-disclosure of certain facts to litigants.”

04:09 PM BST

Mills: Board never discussed ‘sub-postmaster prosecutions’

David Mills has said he cannot remember the Post Office board ever discussing the organisation’s prosecution of sub-postmasters.

However, he told the inquiry he did not think that was a failing on the board’s part.

Counsel to the inquiry Sam Stevens asked: “Is that the case that the board was focussed on solvency and it wasn’t focussed on pros of sub-postmasters?”

Mr Mills: “It certainly had more forecast on solvency that it did on prosecutions, that’s for sure.”

When asked what focus it did have on prosecutions, Mr Mills said: “Not a high level”.

The former chief executive told the inquiry he did not recall the board ever discussing prosecutions.

Yet Mr Mills said he did not think this was a failing, adding: “You have to put yourself in that time. I can see why it should have done now, but it didn’t then.”

03:57 PM BST

Mills says he was unaware of Post Office prosecutions

David Mills has said he was not aware that the Post Office was prosecuting sub-postmasters “in their own right” until the last couple of months before he left his role as chief executive.

Mr Mills said he had “no experience” of companies taking others to court in “their own right”.

Counsel to the inquiry Sam Stevens asked: “When did you first become aware that the PO was involved with the prosecution of sub-postmasters?”

Mr Mills: “Probably as late as November 2005 – the very last knockings of my time there.”

The former chief executive left his role the following month.

He added: “I knew they were taking people to court, I didn’t know they were doing it in their own right without some sort of external independent sign-off.”

03:46 PM BST

Mills refuses to disclose why he resigned from Royal Mail

David Mills has said he resigned from Royal Mail on “matters of importance” - but has not elaborated further on what they were.

Sam Stevens, counsel to the inquiry, asked: “What were those matters of importance?”

Mr Mills replied: “I disagreed with some of the policies that were going to be adopted by the Royal Mail Group.”

When asked if one of those matters related to the board not having a legal function, Mr Mills said: “No, it wasn’t.”

03:44 PM BST

Mills claims to have never seen report that found Horizon was ‘defective’

David Mills has claimed that he never saw the report from IT expert Jason Coyne that found in 2004 that the Horizon IT system was “clearly defective”.

“No, I have never see this report at all,” he told the inquiry, adding that he cannot comment on it based on the three summary paragraphs being shown to him.

Asked why he had not read the document when it was sent to him before the inquiry, he replied: “I’m sorry, if it was, I would have read it. I can assure you of that. And I might well have forgotten the fact that I’ve read it.”

03:40 PM BST

‘If I’d focused on Horizon, the Post Office would never have been turned around’

David Mills has said he “did not assimilate” a note on a risk register about challenges to Horizon – and only remembered noticing that the issue could cost the Post Office £1 million.

The inquiry was shown an email sent to Mr Mills and others from then-contracts manager Keith Baines.

It referred to a note on the organisation’s risk register that read: “Damage to reputation of Post Office and potential future financial losses if PO loses court case relating to reliability of Horizon accounting data at Cleveleys Branch Office.”

The inquiry was also shown the same description on a risk register with an estimated cost given of £1 million.

Mr Mills told the inquiry he had not taken note of the challenge to the reliability of Horizon and suggested it was a matter for the IT director.

He added: “If I’d have concentrated on any issue at that level, I’d have never got anywhere near to turning the Post Office around.”

03:24 PM BST

No one ever told me Horizon was defective, says Mills

David Mills has told the inquiry he was not made aware of complaints about defects in Horizon.

In his witness statement to the probe, Mr Mills said: “I have been asked whether I was concerned by the nature or frequency of allegations made by sub-postmasters that Horizon was defective.

“To be clear, whilst at the Post Office, I was not made aware of complaints to the effect that Horizon was compromised.

“I could not therefore be concerned by the nature or frequency of allegations made by sub-postmasters that Horizon was defective.

“I wish to state that had I been aware of such a situation I would have acted to investigate and remedy such complaints.”

03:23 PM BST

Inquiry resumes

The inquiry has now resumed.

03:13 PM BST

Inquiry takes break

The inquiry has taken a break and will resume at 3.20pm.

03:13 PM BST

Mills ‘barely briefed’ before starting as chief executive

David Mills has said he was “barely briefed on anything, by anyone” ahead of his first day as chief executive of the Post Office.

His witness statement described how he had expected a “full induction programme and/or handover document with a comprehensive list of current risks and issues”.

But describing his first day, the statement read: “When I joined POL [Post Office Ltd], I was barely briefed on anything, by anyone.

“Even the building security team was not expecting me on the first day – I arrived to an empty open-plan office and began work.”

03:10 PM BST

Bates warned Post Office ‘would stop at nothing’ to hide Horizon issues in 2003

Alan Bates warned an MP in 2003 that the Post Office would “stop at nothing” to hide the issues with Horizon.

“The real truth behind all this are the problems with the Post Office Horizon system and the lengths that the Post Office will go to keep it covered up,” he wrote in a letter to Betty Williams, the Labour MP for Conwy, that was shown to the inquiry.

He added: “Post Office Ltd are terrified about the real facts with Horizon being known and it seems they will stop at nothing to keep them hidden.”

02:55 PM BST

Mills ‘only had brainpower’ for Post Office solvency

David Mills has said he “did not have the brainpower” to cope with “anything more” than the Post Office’s solvency.

The former chief executive told the inquiry that “without a question of doubt” the Post Office “faced going under”.

Counsel to the inquiry Sam Stevens asked if this meant he was “fully occupied with looking at the solvency” of the company and “didn’t have the resources” to deal with risks.

Mr Mills said: “It’s sort of my answer, I mean, you’re putting words into my mouth.

“I didn’t have the brainpower to cope with any more, than I was coping with during those first six months, I’m very sorry, but I didn’t.”

02:52 PM BST

Labour told Post Office to pay ‘generous bonuses’

Patricia Hewitt, Labour’s then Secretary of State for Trade and Industry, told Royal Mail to pay Post Office executives generous bonuses based on their performance, David Mills has told the inquiry.

Asked if his remuneration was fixed, he said: “First of all it was fixed, and then, I recall, the secretary of state made it extremely clear to Allan Leighton [chairman of the Royal Mail] 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.

“I eventually joined a thing called the LTIP – the long-term improvement plan, or something like that.”

Asked how his performance was measured, Mr Mills said: “I had quite serious meetings with Allan Leighton who wanted to know what I’d done and when I’d done it.”

02:36 PM BST

Post Office was losing £1m a day when I joined, says Mills

The Post Office was losing £1 million every day when David Mills was first appointed in April 2002.

The former chief executive, who took on the role in April 2002, told the inquiry that becoming solvent was a priority.

“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.

02:27 PM BST

Mills sworn in as Miller’s evidence ends

David Miller has now finished his evidence and David Mills, the Post Office’s chief executive from 2002 to 2005, is now being sworn in.

David Mills was chief executive of Post Office Ltd from April 15, 2002 to December 31, 2005.

The inquiry hears he had a career in banking before joining the organisation – with his last role being general manager of personal banking for HSBC.

02:25 PM BST

Miller: I should have raised Horizon concerns in meeting where I was told to go after pensions

David Miller has told the inquiry he could have raised caution about the Horizon system in a board meeting where he was tasked with raiding the pensions of apparently thieving sub-postmasters.

Tim Moloney KC, who represents a number of sub-postmasters, asked: “Was this an opportunity – given that those fraudsters were sub-postmasters – for you to raise concerns that Horizon was a new system coming in and everybody should be very cautious about the evidence that came out of that system?”

Mr Miller said: “Had I known what I know now, the answer would be yes.”

02:22 PM BST

Miller denies stopping sub-postmasters disputing Horizon shortfalls

David Miller has denied that removing suspense accounts – a decision made as part of the IMPACT programme – prevented sub-postmasters from disputing shortfalls.

Sam Stein KC, who represents several Horizon victims, questioned Mr Miller on IMPACT – which the former chief operating officer acknowledged he had forgotten he was on the board for.

Mr Stein asked: “Right, are you trying to stay that it was removed because you didn’t want sub-postmasters and -mistresses to dispute shortfalls?

“No,” Mr Miller responded.

When pressed on why it was removed, Mr Miller said: “There was a view that previously the suspense account had been used for all sorts of things, and that in the future they wanted it a lot – or we wanted – I’m sorry a lot cleaner.”

When asked if removing suspense accounts meant then removed the ability to help sub-postmasters dispute shortfalls, Mr Miller said: “No, it doesn’t.”

02:20 PM BST

‘Are you a liar or incompetent, Mr Miller?’

David Miller is being questioned on his claim that he did not read the 2003 report by Jason Coyne, an IT expert who found that there were defects in Horizon, during his time at the Post Office.

“I didn’t read it,” he told the inquiry. “I have made that very clear to this inquiry that I didn’t read it and it’s a matter of some regret to me.”

Sam Stein KC, who represents a number of sub-postmasters, asked: “Mr Miller, one of two things arise out of that. You’re either lying through your teeth or you’re a complete incompetent. Which?”

Mr Miller replied: “I’m not lying through my teeth.”

Mr Stein interjected: “So incompetence?”

Mr Miller responded: “If you wish to say that, yes.”

Mr Stein asked: “Do you agree it is incompetence not to have read a report in these circumstances?”

Mr Miller replied: “I am not happy that I didn’t read that report.”

02:02 PM BST

Inquiry set to resume

Lawyers representing sub-postmasters will now begin asking Mr Miller questions.

01:46 PM BST

Pictured: Mills arrives to give evidence

01:10 PM BST

Miller accepts responsibility for Cook not knowing about prosecutions

David Miller has accepted some responsibility for Alan Cook not knowing the Post Office was conducting private prosecutions against sub-postmasters for several years.

Mr Cook told the inquiry on Friday that he did not know the organisation initiated its own legal cases against postmasters until 2009 – despite becoming managing director in 2006.

Mr Miller acted in the role in a temporary capacity three months beforehand.

When asked about Mr Cook’s claim of ignorance, Mr Miller said: “I’m surprised he wasn’t told.”

Emma Price, counsel to the inquiry, said: “You were temporary Managing Director for two to three months before he took up the role and you handed over to him when he arrived.

“Do you think you bore any responsibility for drawing his attention or not?”

“Probably,” Mr Miller responded.

01:03 PM BST

Inquiry breaks for lunch

The inquiry has taken a break for lunch and will resume at 2pm.

12:37 PM BST

Miller ‘may have known Post Office pursued sub-postmasters to cover losses’

Mr Miller has acknowledged he may have known details about the Post Office pursuing sub-postmasters to cover shortfalls in their accounts.

His witness statement reads: “I was aware that POL [Post Office Ltd] would from time to time, pursue postmasters for the recovery of alleged shortfalls branch accounts, including through civil proceedings, but again I did not know any of the detail and was not involved in the oversight of such action.”

When asked if this evidence had changed, he said: “I don’t think I could be so absolute in saying I did not know any of the detail.”

12:34 PM BST

Post Office plotted to raid convicted sub-postmasters’ pensions

The Post Office plotted to raid convicted sub-postmasters’ pensions to make up shortfalls in their accounts, documents shown to the inquiry suggest.

Minutes from a December 2004 board meeting instructed David Miller, its then chief operating officer, to “ensure that the pensions of fraudsters were targeted to help ensure the Company was reimbursed”.

Mr Miller denied proposing the measure as he gave evidence to the inquiry.

Asked if he proposed this plan, Mr Miller told the inquiry: “I don’t recall this in any detail at all. But I certainly didn’t propose that.”

He added: “Seeing it here, it sounds horrendous. Sorry, it sounds severe in terms of its intention.”

The inquiry has previously heard that Post Office investigators received bonuses for meeting targets to recover losses from sub-postmasters’ financial records.

Defects in the Horizon accountancy software meant sub-postmasters were prosecuted for losses which had not actually occurred.

12:30 PM BST

Miller: I should have told the board about the Wolstenholme case

David Miller says he “cannot recall” the exact figure he signed off as as settlement payment for Julie Wolstenholme but believes it was “around £180,000”.

When asked if he could remember what the final figure was, he said: “I couldn’t but I think it was about £180,000-odd.”

Mr Miller confirmed he didn’t inform the Post Office board about the case – but said he expected finance director Peter Corbett to.

The case had been referred to Mr Miller while Mr Corbett was on holiday.

Emma Price, counsel to the inquiry, asked: “Do you think you should have referred it to the attention of the board notwithstanding Peter Corbett’s area of responsibility?”

Mr Miller replied: “I probably should. But before that I should have put a stop to it by saying, you know, ‘This has got to be reviewed properly’.”

12:27 PM BST

Miller ‘missed opportunity’ to uncover Horizon faults

David Miller has told the inquiry he “regrets” the “missed opportunity” Julie Wolstenholme’s case was to uncover Horizon’s faults.

He referred in his witness statement to a meeting he had with Tony Marsh, the Post Office’s then head of security.

“He told me there was an issue with the expert advice which had led our counsel to say the case was unlikely to succeed,” the statement reads. “It was clear that he did not think much of the expert.

“The view was that we should cut our losses and pay up. He said something about Horizon – I cannot recall specifically what he said but I remember checking with him whether there were issues with Horizon (I said something like; ‘you are not saying there are issues with Horizon are you, Tony?’)

“He said that there were no issues and I got the impression it was a one-off case.

“Knowing what I now know about Horizon and the way it was used to wrongly prosecute and bring civil claims against sub-postmasters, I very much regret not reading the expert’s report and counsel’s advice.

“Had I done so I would have taken action to address the issues raised. I acknowledge that by not reading them there was a missed opportunity.”

12:24 PM BST

Post Office bosses told ‘not to circulate’ email referring to Coyne’s Horizon report

Post Office bosses were asked not to circulate an email which included references to a report that was “unflattering to Fujitsu”.

The inquiry was shown an email which related to discussions on a case involving former sub-postmistress Julie Wolstenholme, who ran the Cleveleys branch in Lancashire.

She was pursued by the Post Office for £25,000 through the civil courts. During the case, IT expert Jason Coyne was instructed to assess evidence on whether she was responsible for the shortfalls and he concluded Horizon had defects.

Rod Ismay, the Post Office’s former head of product and branch accounting, highlighted the case to David Miller in an email sent in 2004 which discussed settling with Mrs Wolestenholme.

It referred Mr Miller to background information which described the report as “unfavourable and unflattering to Fujitsu, if not actually hostile”.

“In light of the report, which cannot really be challenged, I do not think that POL [Post Office Ltd] will be able to prove, even on the balance of probabilities that the losses were the fault of the sub-postmaster and our agents are still concerned about the lack of evidence for the losses,” another Post Office senior staff member wrote.

Mr Ismay concluded the email with: “All – please do not circulate this any further than is necessary to support Dave and group legal with this case.”

Mr Miller said he could not help the inquiry with why recipients were asked not to circulate the email.

12:21 PM BST

Post Office wanted ‘as little publicity as possible’ about ‘negative’ Horizon report

The Post Office was “anxious” for a “negative computer experts’ report to be given as little publicity as possible” after it found Horizon was “clearly defective” during its case against sub-postmistress Julie Wolstenholme.

The inquiry was shown legal advice the organisation received in July 2004 in which a lawyer wrote: “I am asked to take into particular acocunt that the Post Office is anxious for the negative computer experts’ report to be given as little publicity as possible.”

Mrs Wolstenholme, who ran a branch in Cleveleys, Lancs, was pursued for £25,000 through the civil courts by the Post Office. But during the case a report by IT expert Jason Coyne into Horizon found it was “clearly defective”.

Mrs Wolstenholme eventually reached a settlement with the Post Office and the inquiry has previously heard she submitted a claim for £188,000. It is not known what she was eventually paid.

12:00 PM BST

Miller concedes ‘error’ in dismissing prosecuted postmaster’s Horizon concerns

David Miller has said it was “an error” to have dismissed a sub-postmaster’s concerns about being unfairly blamed for a £77,000 shortfall.

Lee Andrews refused to accept responsibility for the loss – which he was suspended for following an audit of his Ramsgate branch in June 2003.

A document shown to the inquiry reported how Mr Miller – who was then chief operating officer – and another Post Office colleague had reviewed the case and “all was found to be in order”.

The document continued: “Indeed Mr Miller emailed a response to this effect to Mr Andrews on 10 July 2004 in which he stated: ‘The agreed processes have been followed in this case and I can find no evidence to support your allegations of unfairness’.”

Mr Miller, who said he cannot recall the case, told the inquiry that having read it he had “serious concerns” because Mr Andrews said he couldn’t prove the system was wrong and said that was “unfortunate”.

When asked if would have had the same concerns at the time as he had now, Mr Miller said this was not the case.

“Because there was clearly bubbling up within the business that there were issues with regards to Horizon, the extent to which those were being properly serviced was really quite small,” he said.

He added: “And it says I have reviewed this. I have reviewed the thing, the particular thing that says he couldn’t prove that Horizon was wrong and accepted that. And you know that is clearly an error.”

11:56 AM BST

Sub-postmistress victory would have been ‘threat’

A sub-postmistress’s victory in a 2002 tribunal appeal against the Post Office would have been a “threat” to the Post Office’s business model, David Miller has said.

He was referring to the case of Julie Wolstenholme, a sub-postmistress whose claim for unfair dismissal was dismissed by an employment tribunal in 2002 because she was deemed a formal Post Office emoloyee.

“What she was doing would be considered by me and others to be a threat to the whole... If she was wanting to change the sub-postmasters’ contract and challenge that, that would be a significant challenge to the business model,” Mr Miller said.

“When I say that I mean that it would have changed the economics of how we ran the business if she had won her case.”

11:38 AM BST

Inquiry resumes

The inquiry has now resumed.

11:20 AM BST

Inquiry takes break

The inquiry has taken a break and will resume at 11.35am.

11:20 AM BST

Miller did not raise Horizon errors with new chief executive in 2002

David Miller has said he did not raise any issues with Horizon inaccuracies with David Mills when he was appointed chief executive of the Post Office in 2002.

Counsel to the inquiry Emma Price asked: “Did you raise with him any of the issues there had been recording inaccurate cash accounts ahead of the rollout

Mr Miller replied: “No, I don’t think we discussed that level of detail.”

Ms Price asked: “Did you raise any problems that sub-postmasters had been experiencing in the live trail that had been raised with you?”

Mr Miller responded: “I can’t remember. I don’t think I did.”

The former Horizon programme director did say he discussed issues with training with the incoming chief executive.

11:13 AM BST

Miller ‘forgot’ he was on key board

A former Post Office boss “forgot” he was on a key board set up to prevent dishonest sub-postmasters from hiding discrepancies in their accounts.

The IMPACT programme aimed to update accounting processes at the Post Office in the late 1990s to reduce overall costs, the inquiry previously heard.

Previous witnesses have told how this included plans to remove suspense accounts which staff feared some sub-postmasters were using to hide stolen losses.

David Miller, who held a number of senior roles at the Post Office, today told the inquiry he was on the programme’s board despite previously claiming he had “no involvement”.

In his second witness statement to the inquiry, Mr Miller had initially said: “I had no involvement with the design and implementation of the IMPACT programme. I was aware of it and its progress was reviewed at the executive team.”

But making a correction to this at the beginning of today’s hearing, Mr Miller said: “I make a statement about the IMPACT programme and disclosure this week has reminded me that I was in fact on that board. So I was on the IMPACT board.”

10:59 AM BST

Miller: I found out Post Office prosecuted sub-postmasters in 1970

David Miller has said he first found out that the Post Office brought criminal prosecutions against its own employees in 1970, when he joined as management trainee.

“I became aware of what the Post Office did in terms of prosecutions in 1970 when I joined the company,” he told the inquiry.

“We had a session with the security part of the company, Post Office investigation division, for management trainees and they made it very clear that that was something the company did.

“They were talking primarily then, because I was in Royal Mail, about Royal Mail but they did say that this applied to sub-postmasters.”

10:51 AM BST

Miller denies describing Fujitsu as ‘bayonet up posterior’

A former Post Office boss who was in charge of the initial rollout of Horizon called Fujitsu a “bayonet up my posterior”, the inquiry has heard.

David Miller was quoted in a document shown to the inquiry as describing his feelings towards the company as the same he would have “for the man who had just shoved 15 inches of bayonet up my posterior”.

Asked at the inquiry if he recalled making the comments in the late 1990s, when he was Horizon programme director, he said: “Absolutely not”, adding: “I didn’t make that comment”.

Fujitsu, then called ICL Pathway Ltd, developed Horizon, which went on to erroneously show sub-postmasters’ accounts contained discrepancies and shortfalls.

Its records were used by the Post Office as pivotal evidence in securing the wrongful convictions of hundreds of sub-postmasters who were completely innocent.

10:34 AM BST

I should not have said Horizon was robust, says Miller

David Miller has said he should not have described Horizon as “robust and fit for purpose” in a board meeting in July 1999, when at this time sub-postmasters had complained about its faults during trials and its initial rollout in the late 1990s.

“I should not have said that it was robust,” he told the inquiry.

Mr Miller was then questioned on whether he actually remembered the board meeting.

Counsel to the inquiry Emma Price asked: “What is your position then on whether you did say that?”

Mr Miller replied: “I can’t remember the board meeting but I make the assumption that the board minutes are correct, so I did say it.”

Sir Wyn Williams, chairman of the inquiry, then interjected: “Sorry Mr Miller, I want to be clear about this. You don’t actually remember what you said, you are prepared to assume that the board minutes are correct and if they were correct you should not have said what is recorded? Is that it?

“I’m afraid so, sir, yes,” Mr Miller replied.

10:28 AM BST

Miller tasked to make Post Office ‘solvent’

David Miller said he was tasked with trying to get the Post Office into a “solvent” position when he was appointed as chief operating officer in the early 2000s.

He told the inquiry: “We were running at a loss and we were trying to put ourselves in a position where we didn’t run at a loss.”

Mr Miller explained that in order to run the rural network, the Post Office needed a subsidy from the government.

He went on: “My priority was to do a project called project reinvention which was in fact closing – originally 3,000 – I think in the end it was 2,500 of the non-rural post offices.

“The government had supplied a sum of money £150 million, voted through Parliament, to compensate sub-postmasters and it was an issue of working out where the people wanted to go where we needed post offices and trying to make a best match of the two.”

When asked what kind of briefing he received from then-chief executive David Mills, Mr Miller said: “He focussed very heavily on the need to get the company into a solvent position.”

10:18 AM BST

Postmasters warned of coming ‘tragedy’ during Horizon trials in 1999

Sub-postmasters warned the Post Office during trials of Horizon in 1999 that software problems meant “a tragedy was not far away”.

The inquiry heard in October 2022 that David Miller, then director of the Horizon rollout, had been told by sub-postmasters that there were issues in the accountancy software.

Mr Miller told the inquiry in October 2022: “The difficulties and trauma being experienced by some sub-postmasters were giving rise to concerns for their health and emotional wellbeing.

“It was felt by some that a tragedy was not far away if something is not altered soon.”

10:10 AM BST

Miller held key roles in Horizon rollout

David Miller held key roles in the early stages of the Horizon rollout.

The inquiry hears he joined the Horizon project in 1995 as deputy director – this was a time where hundreds of branches were to begin taking part in trials of the new software.

He was appointed programme director in 1999 and previously told the inquiry that he did not have a “technical background”.

Mr Miller left the director role at “the turn of the year” 1999 into 2000.

10:04 AM BST

Miller making second appearance at inquiry

David Miller has already given evidence in phase two of the inquiry, which looked at the creation and rollout of Horizon, in October 2022.

Emma Price has thanked him for attending to give additional evidence for phases five and six, which look at issues of redress and governance.

09:59 AM BST

Miller prepares to give evidence

David Miller has entered the inquiry room ahead of his questioning by counsel to the inquiry Emma Price this morning.

09:47 AM BST

Post Office scandal timeline

You can remind yourself of how far the Post Office scandal stretches back by scrolling through our timeline below.

09:38 AM BST

Who is David Miller?

David Miller is giving evidence to the Post Office inquiry this morning.

He held various roles in the organisation, including managing director of Post Office Network, chief operating officer of Post Office Ltd and interim managing director of Post Office Ltd.

Mr Miller was also the director of the Horizon programme in 1998 and 1999, overseeing the start of its rollout across the country.

09:33 AM BST

Post Office bosses lied to me, says Davey

Sir Ed Davey has said Post Office executives lied to him when they claimed the Horizon accountancy software could not be accessed remotely.

“Now what’s so shocking, and this has come out through the inquiry, is that they knew all along there was remote access,” the Liberal Democrat leader told Sky News.

“So they must have lied to me, to previous ministers, to ministers after me – and they lied not just to the sub-postmasters who were the victims of this, but to the courts, and the judges and the lawyers.

“So this was lies on an industrial scale and why I actually support people who say that the people who are responsible for this must be held to account – and if that means them being taken to court and going to prison, so be it.”

09:25 AM BST

Davey apologises for not meeting Bates in 2010

Sir Ed Davey, the leader of the Liberal Democrats, has apologised for not meeting Alan Bates in 2010 when the sub-postmasters campaigner wrote to him for the first time about the Horizon scandal.

Sir Ed, who was the Post Office minister at the time, was advised to meet Mr Bates to avoid bad publicity over the scandal.

During a Sky News interview with Kay Burley on Tuesday, he also admitted feeling “embarrassed” about not realising the issues with the Horizon systems.

“I’m sorry for two things,” he said. “I’m sorry that I didn’t see Mr Bates after his first letter – it took me five months to see him, although I was the first Post Office minister to see him.

“Unfortunately, we were lied to. When people lie on such an industrial scale, it’s very difficult. I didn’t see through the lies and I’m sorry about that. It really is very frustrating that I was lied to, ministers from other political parties were lied to.

“Well, of course, when you’re sorry, you wish you’d done something, therefore you feel that you could have gone further.”

Sir Ed was postal affairs minister in David Cameron’s coalition government from 2010 to 2012.

09:21 AM BST

Ex-Post Office chief executive who earned nearly £2m during tenure to give evidence

Welcome to The Telegraph’s live coverage of the Post Office inquiry, which is due to begin at 10am.

A former Post Office chief executive who earned nearly £2 million in pay and bonuses during his tenure will give evidence to the inquiry today.

David Mills, who was previously a banker at HSBC, joined the Post Office in the top role in 2002.

He stepped down at the end of 2005, when Royal Mail axed the role – and his successor Alan Cook was appointed managing director.

Mr Mills’ tenure came in the early stages of the Horizon scandal – which would see more than 900 sub-postmasters wrongfully prosecuted because faulty Horizon software incorrectly recorded shortfalls on their accounts.

His evidence will follow that of former Post Office Network managing director David Miller.

This was a period when many prosecutions took place, but little is known about Mr Miller’s role in the scandal.