Post Office Governance and Horizon Compensation Schemes

Statement

The following Statement was made in the House of Commons on Monday 19 February.

“With permission, Mr Speaker, I shall make a Statement about Post Office governance and the Horizon compensation schemes.

Over the weekend, several serious allegations were made against the Government, my department and its officials by Henry Staunton, the former chair of the Post Office. The allegations are completely false, and I would like to make a Statement to the House so that honourable Members and the British public know the truth about exactly what has happened. I would like to address three specific claims that Mr Staunton made in his Sunday Times interview—claims that are patently untrue.

First, Mr Staunton alleges that I refused to apologise to him after he learned of his dismissal from Sky News. That was not the case. In the call he referenced, I made it abundantly clear that I disapproved of the media breaking any aspect of the story. Out of respect for Henry Staunton’s reputation, I went to great pains to make my concerns about his conduct private. In fact, in my interviews with the press, I repeatedly said that I refuse to carry out HR in public. That is why it is so disappointing that he has chosen to spread a series of falsehoods, provide made-up anecdotes to journalists and leak discussions held in confidence. All that merely confirms in my mind that I made the correct decision in dismissing him.

Secondly, Mr Staunton claims that I told him that ‘someone’s got to take the rap’ for the Horizon scandal, and that was the reason for his dismissal. That was not the reason at all. I dismissed him because there were serious concerns about his behaviour as chair, including those raised by other directors on the board. My department found significant governance issues. For example, a public appointment process was under way for a new senior independent director to the Post Office board, but Mr Staunton apparently wanted to bypass it and appoint someone from the board without due process. He failed to properly consult the Post Office board on the proposal; he failed to hold the required nominations committee; and, most importantly, he failed to consult the Government, as a shareholder, which the company was required to do. I know that honourable Members will agree with me that such a cavalier approach to governance was the last thing we needed in the Post Office, given its historical failings.

I should also inform the House that while Mr Staunton was in post, a formal investigation was launched into allegations made regarding his conduct, including serious matters such as bullying. Concerns were brought to my department’s attention about Mr Staunton’s willingness to co-operate with that investigation.

It is right that the British public should know the facts behind the case, and what was said in the phone call in which I dismissed Mr Staunton. Officials from my department were on the line; the call was minuted, and a read-out was sent after it took place. Today, I am depositing a copy of that read-out in both Libraries of the House, so that honourable Members and the public can see the truth. In those minutes, personal information relating to other Post Office employees has been redacted. For all those reasons, an interim chair will be appointed shortly, and I will, of course, update the House when we have further details.

Finally, Mr Staunton claims that when he was first appointed as chair of the Post Office, he was told by a senior civil servant to stall on paying compensation. There is no evidence whatever that that is true. In fact, on becoming Post Office chair, Mr Staunton received a letter from the Permanent Secretary of the Department for Business, Energy and Industrial Strategy, Sarah Munby, on 9 December 2022, welcoming him to his role and making it crystal clear that successfully reaching settlements with victims of the Post Office scandal should be one of his highest priorities. That letter is in the public domain. The words are there in black and white, and copies of the correspondence will be placed in the Libraries of both Houses.

The reality is that my department has done everything it can to speed up compensation payments for victims. We have already made payments totalling £160 million across all three compensation schemes. That includes our announcement last autumn of the optional £600,000 fixed-sum award for those who had been wrongfully convicted. It is the strongest refutation of those in this House who would claim that we acted only after the ITV drama, “Mr Bates vs The Post Office”, was shown. British people should know that a dedicated team of Ministers and civil servants have been working around the clock for many months to hasten the pursuit of justice, and bring swift, fair redress to all those affected.

To that end, I am pleased that all 2,417 postmasters who claimed through the original Horizon shortfall scheme have now had offers of compensation. The Post Office is dealing promptly with late applications and cases where the initial offer has not been accepted. My department has also established the Horizon compensation unit to ensure that money gets to the right people without a moment’s delay. Last autumn, we announced an additional £150 million to the Post Office, specifically to help it meet the costs of participating in the Post Office-Horizon inquiry and delivering compensation to postmasters. In all, we have committed around £1 billion to ensure that wronged postmasters can be fully and fairly compensated, and through forthcoming legislation, we are taking unprecedented steps to quash the convictions of postmasters affected by the Horizon scandal.

In short, we are putting our money where our mouth is, and our shoulders to the wheel to ensure that justice is done. It is not fair on the victims of this scandal, which has already ruined so many lives and livelihoods, to claim, as Mr Staunton has done, that things are being dragged out a second longer than they ought to be. For Henry Staunton to suggest otherwise, for whatever personal motives, is a disgrace, and it risks damaging confidence in the compensation schemes that Ministers and civil servants are working so hard to deliver. I would hope that most people reading the interview in yesterday’s Sunday Times would see it for what it was: a blatant attempt to seek revenge following dismissal.

I must say that I regret the way in which these events have unfolded. We did everything that we could to manage this dismissal in a dignified way for Mr Staunton and others. However, I will not hesitate to defend myself and, more importantly, my officials, who cannot respond directly to these baseless attacks. Right now, the Post Office’s No. 1 priority must be delivering compensation to postmasters who have not already been compensated. There were those who fell victim to a faulty IT system that the Post Office implemented, and that it turned a blind eye to when brave whistleblowers such as Alan Bates sounded the alarm. We said that the Government would leave no stone unturned in uncovering the truth behind the Horizon scandal, and in pursuing justice for the victims and their families. We are delivering on that promise, while looking for any further possible steps that we can take to ensure the full and final settlement of claims as quickly as possible.

It is right that we reflect, too, on the cultural practices at the Post Office that allowed the Horizon scandal to happen in the first place. It was a culture that let those in the highest ranks of the organisation arbitrarily dismiss the very real concerns of the sub-postmasters who are the lifeblood of their business and pillars of the local community. Although the Post Office may have failed to stand by its postmasters in the past, we are ensuring that it does everything that it can to champion them today, and to foster an environment that respects their employees and their customers. That is how we will rebuild trust and ensure that the British public can have confidence in our Post Office, now and in the future. I commend this Statement to the House”.

My Lords, the Horizon scandal is widely accepted as one of the worst miscarriages of justice in British history. Given the magnitude and duration of the scandal, it is quite astonishing that it seems that every day we get more and more revelations. We get further from the truth and further from true justice for all those who have been victims of it.

Sunday’s allegations could not have been more serious, and the same applies for everything that has emerged since then, not least the memo that was unearthed last night showing Henry Staunton’s recording of a meeting with the then Permanent Secretary at BEIS, Sarah Munby, on 5 January 2023. In that, he was allegedly told to “hobble” into the election; not to

“rip off the band aid”

in terms of the Post Office’s finances; that

“politicians do not necessarily like to confront reality”;

and, finally, that

“now was not the time for dealing with long-term issues”.

This new evidence appears to endorse Mr Staunton’s claim made at the weekend. It is of the utmost importance that both the public and Parliament know the truth. Do the Government continue to deny that any of those conversations took place, as was stated categorically on numerous occasions throughout this week? Given the new evidence, will the Department for Business and Trade now commit to a Cabinet Office investigation into the serious and continued allegations that Mr Staunton has made?

Earlier this week, it was welcome that the Government agreed to publish copies of the letter from Sarah Munby to Henry Staunton on his appointment as chair of the Post Office in December 2022, but that does not go far enough. Given the Secretary of State’s own willingness now to place part of the record in the House Library, I ask once again what I asked on Monday, when we debated this—unfortunately, before the Statement had been made. Given the new evidence that has come to light, will the Government publish all correspondence and minutes of meetings between the relevant departments, UKGI and the Post Office, and put them all in the parliamentary Library?

My Lords, as we have heard, with every day that passes, more questions seem to come up.

In Parliament, the Secretary of State’s Statement was strident—I would say unusually strident—but no matter how loudly and aggressively she asserts her side of the issue, it will not go away without answers and evidence. I support fully the questions that the noble Lord, Lord McNicol, just asked—I will try to interrogate some other areas—but we need answers in order to support or otherwise the Secretary of State’s position. These are answers that the Government can give, not ones they can push into the Wyn Williams inquiry.

Minutes from a call on 27 January show that Kemi Badenoch said to Henry Staunton that she had received

“a briefing on the governance issues at the Post Office and that the complaints against”

Staunton

“are so serious that the government need to intervene”.

The Secretary of State said in Parliament that this included issues raised by other directors on the board. From whom did she receive the briefing on the governance in POL, and where are the notes on its contents? When were the directors’ issues first raised with the Secretary of State, and what form did these complaints take? Were they, for example, letters, emails, calls or meetings? Were any directors’ complaints submitted formally, and how many directors were involved in those submissions?

The Secretary of State’s public statements and comments conflate two issues. One is the possible disquiet as to Staunton’s progress on tackling governance within POL, and the other is an entirely separate accusation of bullying. Does the Minister agree that these two need to be properly separated? The conflation is adding to the confusion. As far as I can see, as yet, there is no documentation to support the bullying part of the Secretary of State’s response. The Secretary of State said that a “formal investigation” was under way into the complaint against Staunton. Who is leading this investigation and when was it started? Staunton says that he was not informed of this bullying complaint, so can the Minister confirm if, when and how Staunton was informed of this bullying complaint and whether he has yet to be contacted by an investigator?