Row deepens between Badenoch and ex-Post Office chair

Media caption, Ex-Post Office chair ‘seeking revenge’ – Badenoch

By Michael Race

Business reporter, BBC News

A row has deepened between Business Secretary Kemi Badenoch and the Post Office chair she sacked, after he said he had been told to delay compensation payments for sub-postmasters.

Henry Staunton said he had been told to stall payouts to allow the government to “limp into the election”, apparently to help state finances.

But Ms Badenoch said the claims were “completely false” and accused him of spreading “made-up anecdotes”.

Mr Staunton has stood by his comments.

The row first erupted at the weekend when the former Post Office chair said in an interview with the Sunday Times, he was told by a senior civil servant to slow down compensation payments to postmasters.

Between 1999 and 2015, hundreds of sub-postmasters and postmistresses were wrongly prosecuted after a faulty computer system called Horizon made it look like money was missing from their branches.

Some sub-postmasters wrongfully went to prison, many were financially ruined. Some have since died.

The government has promised to quash convictions and pay compensation, but concerns have been raised over the speed and complexity in victims securing financial redress, with just 33 claims fully settled.

Mr Staunton, who has been on boards of companies ranging from ITV to WH Smith, was appointed as chair of the Post Office in December 2022, but was dismissed by Ms Badenoch last month.

He told the Sunday Times that early on in his role, “I was told by a fairly senior person to stall on spend on compensation and on the replacement of Horizon, and to limp, in quotation marks – I did a file note on it – limp into the election”.

“It was not an anti-postmaster thing, it was just straight financials,” he said. “I didn’t ask, because I said: ‘I’m having no part of it – I’m not here to limp into the election, it’s not the right thing to do by postmasters’.”

Image source, UK Parliament

Image caption, Henry Staunton stood down as Post Office chairman last month

His comments prompted critical response from Ms Badenoch on social media on Sunday, before the business secretary made a statement to the House of Commons on Monday in which she said Mr Staunton’s claims were are “completely false” and “a blatant attempt to seek revenge following dismissal”.

“There would be no benefit to us whatsoever of us delaying compensation,” she added. “This does not have any significant impact on revenues whatsoever – it would be a mad thing to even suggest.”

She said there was “no evidence whatsoever” that Mr Staunton was told by an official to stall payouts, later adding: “Actually if such a thing was said, it is for Mr Staunton himself to bring the evidence.”

In response to Ms Badenoch, a statement for Mr Staunton said he stood by the comment and that he had “he recorded at the time in a file note which he emailed to himself and to colleagues and which is therefore traceable on the Post Office server”.

The Post Office told the BBC it would not be appropriate to comment “on confidential emails that allegedly may or may not have been sent”.

“Mr Staunton is not in the habit of resorting to fabrication or invention and decided to go public out of a desire to ensure that the public were fully aware of the facts surrounding the multiple failures that have led to postmasters in this country being badly let down,” the statement added.

Mr Staunton himself said it was in the “interests” of the Post Office to speed up “progress on exoneration and that compensation for wrongly convicted postmasters was more generous, but we didn’t see any real movement” until after an ITV drama depicting the scandal aired earlier this year.

“We will leave it to others to come to the conclusion as to why that was the case,” he added.

Mr Staunton also claimed that when he was sacked, Ms Badenoch had told him: “Someone’s got to take the rap.”

The government has denied the claims about delaying compensation and Ms Badenoch told MPs the reason she dismissed Mr Staunton was “because there were serious concerns about his behaviour as chair, including those raised from other directors on the board”.

“While he was in post a formal investigation was launched into allegations made regarding Mr Staunton’s conduct, this included serious matters such as bullying,” she said, adding that concerns were also raised about his “willingness to co-operate” with the investigation.

She added it was “so disappointing that he’s chosen to spread a series of falsehoods, provide made up anecdotes to journalists and leak discussions held in confidence”.

In response to the bullying allegations, a spokesman for Mr Staunton said it was the “the first time the existence of such allegations have been mentioned”.

“Mr Staunton is not aware of any aspect of his conduct which could give rise to such allegations,” a statement added. “They were certainly not raised by the secretary of state at any stage and certainly not during the conversation which led to Mr Staunton’s dismissal.

“Such behaviour would in any case be totally out of character.”

Late on Monday, a copy of a readout of the phone call to dismiss Mr Staunton on 27 January was published. It noted that the business secretary had received a briefing on “the governance issues at the Post Office” and that the complaints against Mr Staunton were “so serious” that the government needed to intervene.

The readout did not contain the specific words “someone’s got to take the rap”, but Mr Staunton said he stood by “his characterisation of the conversation”.

Jonathan Reynolds, Labour’s shadow business secretary, said there were now “two completely contrasting accounts, one from the former chair of the Post Office and one from the secretary of state”.

“Only one of these accounts can be the truth,” he said. “What we need now is transparency and scrutiny.”

Media caption, Reynolds: Faith in the government over a series of scandals is “hanging by a thread”

Liam Byrne, Labour MP and the chair of the Business and Trade Committee, told the BBC he had approached Mr Staunton to attend a session next week.

The committee will be hearing evidence from Post Office chief executive Nick Read and Alan Bates, a former sub-postmaster whose battle against the Post Office inspired the recent ITV drama into the scandal and thrust it back into the spotlight.