Badenoch accused of 'astonishing' claims as row with ex Post Office chairman escalates

Ex Post Office chairman Henry Staunton says Business Secretary Kemi Badenoch (pictured above) was wrong to say he had made up stories about being told to delay paying money to postmasters affected by the scandal

The former chairman of the Post Office has hit back at claims he spread “made-up stories” after being sacked.

Henry Staunton said Business Secretary Kemi Badenoch was wrong to say he had made up stories about being told to delay paying money to postmasters affected by the scandal. Ms Badenoch told MPs there was “no evidence whatsoever” of his story and said it was “a blatant attempt to seek revenge” for losing his job.

She also said he was being looked into over claims he bullied people before he was sacked, and that there were worries about his “willingness to co-operate” with the investigation. But a spokesperson for Mr Staunton said Ms Badenoch had made an “astonishing series of claims” about what happened.

They said he had written down the comment about delaying compensation “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”. About the alleged bullying investigation, the spokesperson said: “This is the first time the existence of such allegations have been mentioned and Mr Staunton is not aware of any aspect of his conduct which could give rise to such allegations.”

“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.”

Mr Staunton, who was sacked by the Business Secretary last month, used a Sunday Times interview to suggest that the alleged request to delay payouts was linked to concerns about the cost of Horizon scandal compensation heading into the election. Ms Badenoch had said allegations relating to Mr Staunton’s conduct, including “serious matters such as bullying”, were being examined and concerns were also raised about his “willingness to co-operate” with the formal investigation.

Speaking in the Commons, she also described it as “so disappointing that he’s chosen to spread a series of falsehoods, provide made-up anecdotes to journalists and leak discussions held in confidence”. Ms Badenoch said it had confirmed in her mind that “I made the correct decision in dismissing him”.

She told MPs: “Mr Staunton claimed 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 from other directors on the board.

“My department found significant governance issues, for example, with the recruitment of a new senior independence director to the Post Office board. A public appointment process was under way but Mr Staunton apparently wanted to bypass it, appointing someone from within the existing board without due process.

Ms Badenoch added: “He failed to properly consult the Post Office board on the proposal, he failed to hold the required nominations committee, most importantly he failed to consult the Government as a shareholder which the company was required to do. I know that MPs will agree with me that such a cavalier approach to governance was the last thing we needed in the Post Office given its historic failings.

“I should also inform the House that 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. Concerns were brought to my department’s attention about Mr Staunton’s willingness to co-operate with that investigation.”

Mr Staunton’s spokesperson said that the Business Secretary’s comments about the public appointment process were “once again a mischaracterisation of the situation”. They said the Government via the UKGI had proposed an external candidate for the post, but the Post Office board ultimately voted 6-2 to appoint an internal candidate who was “in their view better qualified”.

A statement attributed to Mr Staunton, who took up the Post Office role in December 2022 following nine years as chairman of WH Smith, said: “It was in the interests of the business as well as being fair for the postmasters that there was faster progress on exoneration and that compensation for wrongly convicted postmasters was more generous, but we didn’t see any real movement until after the Mister Bates programme. We will leave it to others to come to the conclusion as to why that was the case.”

Jonathan Reynolds from Labour insisted that the Government must show that claims they tried to slow down payments to people hurt by the Horizon scandal are not true. He said: “Yet we do now have two completely contrasting accounts, one from the chairman of the Post Office, and one from the Secretary of State, and only one of these accounts can be the truth.”

Ms Badenoch said: “There would be no benefit whatsoever of us delaying compensation. “This does not have any significant impact on revenues whatsoever. It would be a mad thing to even suggest, and the compensation scheme which Mr Staunton oversaw has actually been completed, and my understanding is 100% of payments have been made, so clearly no instruction was given.”

While Ms Badenoch stated that not all correspondence between the Government and the Post Office would be released due to an ongoing investigation, she did mention that ministers would “consider” releasing “correspondence between departments and Mr Staunton in accordance with Freedom of Information rules”.

Over 700 branch managers were prosecuted by the Post Office between 1999 and 2015 because of faulty accounting software that appeared to show missing money from their shops. Many subpostmasters and subpostmistresses are still awaiting payout despite the Government announcing that those who have had their convictions overturned are eligible for £600,000 payouts.