Post Office Governance and Horizon Compensation Schemes

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 hon. 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 hon. 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 hon. 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.

I firmly agree that the revelations in The Sunday Times at the weekend could not be more serious. In particular, if true, the claim that the Post Office was instructed to deliberately go slow on compensation payments to sub-postmasters in order to push the financial liability into the next Parliament would be a further outrageous insult in a scandal that has already rocked faith in the fairness of the British state. If that is the case, it cannot be allowed to stand, and if it is not, it must be shown to be false in no uncertain terms. We have two completely contrasting accounts: one from the former chair of the Post Office, and one from the Secretary of State. Only one of them can be the truth. I hope that we are all in agreement that Parliament is the correct place for these matters to be raised and clarified. What we need now is transparency and scrutiny.

Will the Secretary of State categorically state that the Post Office was at no point told to delay compensation payments by either an official or a Minister from any Government Department, and that at no point was it suggested that a delay would be of benefit to the Treasury? Will there be a Cabinet Office investigation to ensure that no such instruction or inference was given at any point? Crucially, is the £1 billion figure for compensation, which the Secretary of State helpfully just repeated, already allocated, and sat in the accounts of the Department for Business and Trade, ready to be paid? If it is not, will compensation payments be specifically itemised in the upcoming Budget?

The Secretary of State will also understand that following the story at the weekend, victims of other scandals—especially of the contaminated blood scandal—feel that they need to ask whether they have been the victims of deliberate inaction. Will the Government provide assurances that no such obstruction has been placed on any payments of this kind? If so, can they explain what the delay is in some cases? In the full interests of transparency, and to fully ascertain the veracity of any allegations for sub-postmasters and the general public, will she publish all relevant correspondence, and minutes of meetings between the Department, the Treasury, UK Government Investments and the Post Office during this time? Finally, when can we expect the legislation on exoneration that was promised by the Prime Minister?

I welcome the tone that the shadow Front-Bench spokesman has taken. There is often a tendency for political point scoring, but I think we both agree that this is very much about the postmasters. That is why I ensured that I was at the Dispatch Box: so that people would know the truth. That is what builds trust.

The shadow Minister asked whether I would categorically state that no instruction was given to delay payments. Yes, I can. We have no evidence whatever that any official said that. If such a thing was said, it is for Mr Staunton to bring the evidence. It is very hard to refute a negative. People making wild, baseless accusations and then demanding proof that they did not happen are making mischief, in my view. As far as I have seen, all the evidence points to the fact that no one gave that instruction.

It is also important to look at whether it would even make sense to do so. There would be no benefit whatever to our delaying the compensation, which has no significant impact on revenues. It would be a mad thing even to suggest. The compensation scheme, which Mr Staunton oversaw, has been completed. My understanding is that 100% of payments have been made, so clearly no such instruction was given. The hon. Gentleman mentioned the infected blood inquiry. This is a good example of how people lose faith in the system because of misinformation. That is why I am here to correct the record.

The hon. Gentleman asked about the £1 billion allocation. We give monthly reports that show exactly what payments are being made. He also asked whether we will publish correspondence. No, we will not publish in full all correspondence between Departments, UKGI and the Post Office. That is because we set up the statutory inquiry, which will examine the important issues related to the Horizon scandal, as well as current governance arrangements. We are fully co-operating with the inquiry, but the inquiry was set up by Parliament specifically to look at that. In addition to the read-out of the true content of my telephone call with Mr Staunton, we will consider publishing correspondence between Departments and Mr Staunton in accordance with freedom of information rules, so that people will know exactly what happened, contrary to his account. The hon. Gentleman asked about legislation. That is something that we are actively working on. I expect that we will be able to deliver on that imminently.

When I was the postal affairs Minister, the officials in my team not only shared my drive to get the money out of the door—life-changing money for postmasters—but were energised and empowered to do so. I cannot believe for a minute that just a few months later they would be doing and thinking the polar opposite. Clearly, they cannot defend themselves in public, so will my right hon. Friend confirm that conversations about colluding to slow down the compensation did not happen? It is important that we double down and get more money out of the door as soon as possible.

I pay tribute to my hon. Friend for all his fantastic work as the postal affairs Minister, and I can confirm that. My officials have looked through all the correspondence, and all the minutes of the conversations that Mr Staunton had with the Department. They found absolutely nothing, and he did not raise the matter in his call with me. If it were something that officials had said to him, surely he would have mentioned it to Ministers—either myself or the postal affairs Minister, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake). The fact that Mr Staunton did not do so shows that it is quite likely something that he is making up.

I call the SNP spokesperson.

I am at a loss today: another Monday, another Post Office scandal. I have tried very hard to pull together my thoughts on the statement, what was said in The Sunday Times, and what was said in this place less than two weeks ago when I led a Backbench Business debate on the culture of Post Office management.

I will ask the Secretary of State a few questions. Will she place on the record whether Nick Read wrote to the Justice Secretary last month defending the convictions, saying that some postmasters were guilty? That is a serious allegation, and I would really like to have an answer.

There has been talk all morning about damaging confidence in the compensation schemes. If there is confidence in them, can the Secretary of State explain why so many leading sub-postmasters affected by the scandal were given such derisory offers, months and months late? That is just not on. The Secretary of State cannot say that Henry Staunton damaged the compensation schemes; it was down to the Government and Post Office Ltd.

Is the Secretary of State aware that Post Office Ltd still employs 40 investigators who secured convictions? I agree with what the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) said: exoneration must be hurried up and compensation must be paid sooner rather than later. I have said that every month for the last nine months.

The hon. Lady asks multiple questions. The first is about a letter written by Nick Read, Post Office’s chief executive, to the Justice Secretary. What I can say is that UKGI and Post Office Ltd have both vehemently denied that Nick Read was put under any pressure to write the letter she refers to.

On the risks of making a decision on blanket exoneration, the postal affairs Minister, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), has said repeatedly that we have been faced with a dilemma: either to accept the present problem of many people carrying the unjustified slur of conviction, or to accept that an unknown number of people who have genuinely stolen from their post offices will be exonerated and perhaps even compensated. That is the case, and it is certainly what the Government believe. What she says about people being put under pressure to write a letter is something that UKGI and Post Office Ltd have both vehemently denied.

The hon. Lady repeats Mr Staunton’s allegations, but I have already given a statement saying that they are completely false. She asks about individual cases of people who have been paid. I cannot comment on individual cases, but I would like to clarify that the main scheme in place under Henry Staunton’s watch was the Horizon shortfall scheme. Some 2,417 people were made offers within the original deadline. One hundred per cent have received offers, but 84% have accepted offers. I just wanted to clarify my previous comments.

On the 40 prosecutors still working for Post Office, I have had multiple people giving different bits of information. The inquiry is looking at that and will get to the bottom of it.

Will the Secretary of State review the governance of UKGI? How did it manage to preside over the Post Office with its dreadful treatment of sub-postmasters? How did UKGI allow senior Post Office managers to rack up and accumulate losses of £1,390 million, effectively bankrupting the Post Office so that it can now trade only if it has the reassurance of massive cash infusions from the Treasury on a continuing basis? Surely this body has done very badly, and we need a better answer.

That is one of the reasons why we have been making personnel changes in this area. It goes back to the point I was making in the statement: Post Office needs an effective chair. Until the day I had the conversation dismissing him, I never had any correspondence from Mr Staunton about difficulties that he was having with UKGI. If he was having difficulties, he should have told me, rather than give an interview to The Sunday Times effectively stating that he had no control over the organisation that he had been appointed to run.

The Secretary of State says we have to accept that Henry Staunton’s accusations are completely false. The letter that Nick Read wrote to the Lord Chancellor about overturning convictions mentioned that about 300 people are possibly going to be “guilty”. She has just told the House that the investment body did not instruct him to do that. Henry Staunton said he did not tell Post Office to write the letter, and the board did not know about it, so who did? For the sake of openness and transparency, she should produce all correspondence between UKGI and Post Office. The Secretary of State has accused Henry Staunton of lying in public. The only way we can judge whether she is telling the truth is if we have all the information out there.

Can I just say to the Secretary of State, in relation to her obsession with tweeting, that although she says that people are jumping “on the bandwagon”, some of us have been involved in this for many years on a cross-party basis, including through work with her colleague the Under-Secretary of State for Business and Trade, the hon. Member for Thirsk and Malton (Kevin Hollinrake), so that is quite insulting. What message will the Secretary of State’s tone today send to sub-postmasters? I will tell her: more cover-up and obfuscation. Get the information out there and explain what is going on. Otherwise, she will not have their trust. It will just be more of the same that we have seen over many, many years.

I completely reject the right hon. Gentleman’s assertions. This is the political point scoring that I talked about earlier, which we just need to stop. Rather than focusing on the issue, he is talking about my tweeting. Maybe he should get off Twitter and actually listen to what I am saying at the Dispatch Box. He is talking about a letter that UKGI says it did not ask Nick Read to write. The only possible answer is that Nick Read himself decided to write that letter. I did not ask him to write it, the Post Office says that it did not, and UKGI did not. These are the sorts of things I am talking about—continuing to make aspersions about Ministers. We have made the Post Office an independent body, we have an independent inquiry, and the information will come out in due course.

There is no doubt that there was a bad culture in the Post Office for a very long time. It misled a significant number of Ministers, who, to put it gently, could have been more inquiring over the years. Has my right hon. Friend had time to reflect on the words of the non-executive members of the board representing the postmasters, who say that only days before she sacked the chairman, there was still a culture in which they were viewed as guilty and on the take? If that sacking has brought compensation to those people, who were traumatised and misled by the Post Office, and who had their lives destroyed, her decision will go down as a very welcome one.

I agree with my right hon. Friend. The comments by the members of the board who are former postmasters are very interesting. They are saying exactly what I am saying: that Henry Staunton was not doing a good job as Post Office chair. That leads me back to the point made by the right hon. Member for North Durham (Mr Jones), who is more interested in attacking the Government than in looking at what even the members of the board are saying. It is important that we continue to give confidence to people that those organisations are run properly. That was the reason for the dismissal.

Having supported constituents in negotiations in relation to the historical shortfall scheme, I can tell the Secretary of State that, whatever the reason for it, the conduct of the Post Office and its agents was characterised by delay and obstruction. That, in turn, led to the view taking hold among sub-postmasters that there was no point in making claims. Since the ITV drama aired, I have heard of several constituents making belated claims. What more are the Government doing to ensure that everybody out there who may have a claim is able to receive compensation?

The right hon. Gentleman’s question is a good one. The fixed-sum awards show that we are taking the matter very seriously. I became Business Secretary in February last year, and my one priority was to ensure that people got their compensation as quickly as possible. I did everything that I possibly could, with the Minister with responsibility for the Post Office, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), whom I thank for his tireless efforts. He had been looking at the portfolio before I got the job as Business Secretary, and I knew that the work was in safe hands. We have worked together as a team, fought cross-departmentally to ensure that people got the compensation that they deserved, and brought in legislation just before December—well before the ITV drama. The cases that the right hon. Gentleman raises are important, as they show that there is still a lot of work to do, and we will continue doing it.

Given the Post Office’s track record with accuracy, I am very glad that we have heard from the Secretary of State—I would rather take her assurances at the Dispatch Box than anything from a disgruntled, sacked former employee of the Post Office. Even during last week’s recess, I still had constituents coming to me saying that they were affected by the Horizon scandal, so can the Secretary of State assure the people watching that the process is very quick and simple? People who still feel that they lost money during that horrendous period need to keep coming forward, because there is an easy process: they can fill in a form to make sure their voice is heard and that they get compensation.