Post Office Ltd

(Urgent Question): To ask the Secretary of State for Business and Trade if she will make a statement on the removal of Henry Staunton as Post Office Ltd chair and wider governance issues within the organisation.

Following a conversation with the Secretary of State for Business and Trade over the weekend, Henry Staunton agreed to step down as chairman of the Post Office. An interim chair will be appointed shortly, and a recruitment process for a new chair will be launched in due course, in accordance with the governance code for public appointments. I will update the House when we have further details.

The current chairmanship was not proving effective, and we had a difficult decision: change course, or wait and hope that it improves. Given the challenging context for the Post Office and the importance of the role of chair, the Business Secretary took decisive action. I understand that Members would like more details around the decision, especially considering that the Post Office is rightly under heightened scrutiny at this time. I can confirm that there were issues beyond the handling of the Horizon scandal, but as hon. Members would expect, I am not able to comment on the specifics of individual human resources cases.

As the Business Secretary has said, Post Office governance is a priority for the Government. The Post Office is a public corporation; as such, the Post Office board has responsibility for the strategic direction of the company. While there was a clear need for new leadership of the board, we continue to have confidence in the other board members, who are experienced executives with a range of business expertise across the legal, financial, insurance, asset management and pensions sectors; there are two elected postmaster non-executive directors, too.

The Post Office faces unprecedented challenges. It needs to work at pace to deliver compensation to the thousands of postmasters who fell victim to a faulty IT system, as well as to continue the essential work to implement the necessary operational and cultural changes needed in the business. As such, strong and effective leadership of Post Office Ltd is a necessity.

I thank the Minister for his response. It is concerning that the Secretary of State’s move towards clarity and better governance at Post Office Ltd begins with the Government being on a different page from Post Office Ltd on whether Staunton was fired or left by mutual consent. Will the Minister clarify that? Is it possible that Mr Staunton is being made a scapegoat to take the heat away from this Government, and those who came before, the Government being the sole shareholder in Post Office Ltd?

Back in July, the Minister for Enterprise, Markets and Small Business said in a debate on POL’s management culture:

“Through the shareholder’s representative on the board, the Government oversee the Post Office’s corporate governance, strategy, performance and stewardship of its financial and other resources.”—[Official Report, 13 July 2023; Vol. 736, c. 180WH.]

That is not the same as the chairperson. Are the Government satisfied that the UK Government Investments board representative has adequately fulfilled his oversight role? Indeed, has Tom Cooper, who stood down in May, been replaced? That is not clear from Post Office Ltd’s website.

It is clear that the governance model simply has not worked. The arm’s length approach used by successive Governments has allowed scandal after scandal to fester. The post office network is in disarray. Financial redress to postmasters is far too slow and, in some cases, wholly inadequate. The remuneration package for sub-postmasters means that many are working for below the minimum wage, and services are continuously being stripped away. Does the Minister have confidence that the removal of Mr Staunton will speed up financial redress for victims and bring about change in the management culture of Post Office Ltd?

I thank the hon. Lady for her work; the all-party parliamentary group on post offices does a tremendous job. The phrase used in the statement was “mutual consent”, but it is fair to say that the Government exercised their right to remove the chairman; the hon. Lady can deduce from that what she will. This is not a case of allocating responsibility for the past problems of the Post Office; we are simply saying that we need new leadership going forward. There were specific circumstances around the chairman that meant that we felt that he was not the right person to lead the organisation of the board at this time.

The shareholder representative on UKGI, as the hon. Lady was right to say, is not the chair; it was Tom Cooper, but is now Lorna Gratton. Do I have confidence in her? Yes, I do. I meet her regularly and have a high degree of confidence in her.

Compensation is too slow—we accept that. A number of measures were introduced prior to the TV drama, as the hon. Lady puts it, including the fixed-sum award of £600,000 for overturned convictions. We have also introduced a fixed-sum award for the group litigation order to expedite compensation. That is something on which I am absolutely focused on a daily basis.

I accept what the hon. Lady says about the remuneration of sub-postmasters around the country. Part of that, of course, is about consumer habits—where we shop on the high street. We are keen to identify new sources of revenue, including through the banking framework, which is a potential lucrative opportunity, and parcel hubs.

On the issue of confidence in the individuals, let me say that, having been a board director myself for 30 years, you are only as good as your last game, so it is fair to say that, at this point in time, we did not feel that Henry Staunton was the right person to lead the board.

Given the Government’s role as the sole shareholder in the Post Office, and the associated liabilities and responsibilities that go with that, when will the Secretary of State for Business and Trade make public all the associated papers related to Horizon and this entire scandal, so that the victims as well as the country can see where the responsibility for all this lies? By doing so, the Government will be able to take the right kind of action and support the victims as they seek compensation.

I thank my right hon. Friend for her question and the work that she has done on this. We set up the inquiry in 2021 to undertake that work. Those documents are public and subject to public scrutiny. She may have watched some of the inquiry sessions, which were very revealing about some of the conduct that happened at the Post Office. That inquiry is due to conclude by the end of this year and then report probably sometime next year. We will have a much clearer understanding then of who is responsible, and, as is often said at this Dispatch Box, that is the time to hold those individuals to account.

I call the shadow Minister.

The Post Office Horizon scandal is one of the most insidious injustices in our country. It has robbed innocent people of their livelihoods, their liberty and, all too sadly, their lives. At least 60 postmasters have died without seeing justice or receiving compensation and at least four have taken their lives. Twenty years on, sub-postmasters and their families are still suffering from the consequences and the trauma of all that they have been put through.

The scale of the scandal is so vast that getting the right leadership in place at the Post Office is of paramount importance. However, to decide to eject the chair during the weekend with no real opportunity to get the details of the decision on the public record is unusual, to say the least. People need to know that removing Henry Staunton was a substantive, evidence-based decision if we are to have confidence in that decision. Can the Minister assure us that this decision was, indeed, substantive and not just the result of a personal falling out between Mr Staunton and the Secretary of State?

The Minister has talked about setting a timeline “in due course” for replacing Mr Staunton. In the context of what has happened in the Horizon scandal and the big challenges facing the Post Office, strong leadership is vital at this point in the process. I hope that he will be able to share as quickly as possible further information about the timeline and when the post will be filled.

What confidence can the Minister provide that this change will lead to the wholesale culture change that is desperately needed to make sure that this never happens again? Mr Staunton was not in the Post Office during the Horizon scandal—he has only served in the position since 2022—and this scandal has never been about the actions of one single individual.

Finally, the priority for us all in this House is the fast-tracked exoneration of all remaining convictions and the delivery of rightful redress or compensation to all the affected sub-postmasters as quickly as possible. Will the Minister provide an update on when we will see more progress on those matters to make sure that we take urgent steps to fix the seismic damage of this scandal?

It certainly was not something that we wanted to do on a weekend. There was a chance that it would come into the public domain by other means, which is why a conversation had to take place over the weekend. We did not think that it would be right for the individual to hear about the potential course of action by other means than the Secretary of State speaking to him. I think that was the right thing to do. I do not know why the hon. Lady would feel, or whether she any evidence, that there was some kind of falling out, as she put it; this was about very serious governance issues related to the person who headed the board of the organisation, which are obviously confidential human resources issues.

On the timeline to replace Mr Staunton, as I said, we will do so as quickly as possible. We are looking at recommendations as we speak, and we will report back to the House as soon as possible on an interim and a permanent replacement. This was not about holding somebody responsible for past problems in the Post Office; it was about the governance of the Post Office going forward. That is why a mutual agreement took place for Mr Staunton to step down.

We are working at pace to deliver the blanket overturning of convictions. We are keen to update the House as quickly as possible, and should do so in the coming days.

As a member of the Business and Trade Committee, I was deeply concerned by the inability of Mr Read, the chief executive officer of Post Office Ltd, to answer an array of very simple questions. In fact, he appeared not even to have done his basic homework when it came to looking back at the Horizon scandal. Although he was not the CEO at the time of the scandal, what confidence do the Government have in Mr Read as chief executive officer to turn it around, and has he yet made public the board minutes that show when the matter was brought to the board’s attention for the very first time? If any board member was complicit in hearing that information and not acting upon it, what steps will the Government take with lawyers to ensure that they are held accountable?

I thank my hon. Friend for his work on the Select Committee. I was present for his line of questioning during that session. The chief executive committed to providing responses to the Committee; I am not sure whether they have been provided thus far. A number of questions needed to be addressed, and it is right that those answers be provided. As far as the Government are concerned, our primary means of achieving that is through the inquiry, which is hearing important evidence right now, and will conclude its work by the end of the year and report shortly afterwards.

I call the SNP spokesperson.

Surely if ever there was a time to consider removing Mr Staunton from his post, it was after it emerged last year that bonuses were being paid to Post Office executives simply for doing what I think we would all expect them to: co-operating fully with the Horizon inquiry. I think that people will be forgiven for having the suspicion that, when it comes to Horizon, Ministers have been a bit like the Japanese moon lander, suddenly bursting to life as soon as a bit of light is shone on them, in this case by an ITV programme.

I have two questions. First, Fujitsu’s representatives told the Business and Trade Committee a fortnight ago that Fujitsu had a “moral obligation” to contribute to the financial redress for the victims. Has the Secretary of State had any discussions yet with Fujitsu about how and when that might happen, as well as about the size of the contribution that it might make? Secondly, with regard to the continued unexplained shortfalls in Horizon, will the Government commit to revealing how much in excess the Post Office claimed back from staff, resorting to forensic accountancy if required?

The bonuses were returned voluntarily by anybody who received them for that sub-metric, and the chief executive returned his bonuses from across the entire inquiry.

On the point about the Government picking up the pace because of the ITV drama, I would say a couple of things. We were putting a number of measures in place already. We had put in place the Horizon compensation advisory board, which has Lord Arbuthnot as one of its key members. A fixed-sum award was introduced last autumn. We were looking at advice on overturning convictions. Things were happening at pace in this area prior to the dramatisation, but of course we are public servants and members of the public. Of course we want to expedite things, and the impetus behind them is at a raised level because of the public outcry.

Conversations are ongoing with Fujitsu. In my view, the best point to negotiate is when we have all the evidence at our disposal, which will not be until the inquiry concludes. We welcome the fact that the company has taken and accepted some moral responsibility to contribute towards the compensation and we will take it at its word, but negotiating at the right point is the right way to deal with that.

The question of any excess moneys that came back from postmasters effectively into Post Office accounts is an important one, which we are asking now, and we hope to get answers in the near future.

I spoke recently to a couple of my constituents whose parents were wronged by the Post Office Horizon scandal. Now they are being asked to provide invoices from more than 20 years ago to prove that they bought the Horizon system—records the Post Office itself admits it does not keep. Does my hon. Friend agree that it is right that we focus on those who have been wronged, and that the benefit of the doubt must be with those postmasters who were completely wronged?

That is absolutely right. It should not be the case that a postmaster has to evidence a document that does not exist. The benefit of the doubt should be with the postmaster. Of course it is fair to ask, “Do you have documentation to support any claim you are making?”, but if the evidence is not there, the benefit of the doubt should be with the postmaster.

I call the Chair of the Select Committee.