Ex-Post Office chair reveals bombshell memo of meeting where top mandarin 'told him to delay compensation for postmasters so Government could 'hobble' into election'

The Government tonight rejected fresh allegations it had ordered the former boss of the Post Office to stall on compensation payments to wronged postmasters.

Henry Staunton, the Post Office chairman between December 2022 and last month, claimed he was told by a top civil servant to ‘hobble’ into the election on the issue.

He said Sarah Munby, who was then permanent secretary at the Department for Business, Energy and Industrial Strategy, warned him ‘now was not the time for dealing with long-term issues’ and he should not ‘rip off the band aid’.

In her first meeting with Mr Staunton on January 5 last year, the senior mandarian is also said to have told him that ‘politicians do not necessarily like to confront reality’.

The bombshell claims were included in a contemporaneous note of the meeting made by Mr Staunton, which he shared with The Times.

But the Government tonight published a letter from Ms Munby to Business Secretary Kemi Badenoch in which stressed it was ‘not true’ that she ‘made any instruction, either explicitly or implicitly, to Mr Staunton to in any way delay compensation payments’.

Henry Staunton, who was Post Office chairman between December 2022 and last month, revealed how he was told not to ‘rip off the band aid’ by a top civil servant

Business Secretary Kemi Badenoch this week launched a furious fightback in a row over postmasters’ compensation and claimed Mr Staunton was spreading ‘made-up anecdotes’

The Horizon scandal saw more than 700 subpostmasters and subpostmistresses handed criminal convictions between 1999 and 2015

Mr Staunton was already caught up in an angry row with ministers after claiming at the weekend he was told to stall on compensation payments over the Horizon scandal to help the Tories.

Mrs Badenoch launched a furious fightback and claimed Mr Staunton was spreading ‘made-up anecdotes’ after she fired him last month.

The Cabinet minister told MPs this week there was ‘no evidence whatsoever’ of his account and branded it ‘a blatant attempt to seek revenge’ for his sacking.

The Horizon scandal saw more than 700 subpostmasters and subpostmistresses handed criminal convictions between 1999 and 2015 as Fujitsu’s faulty Horizon system made it appear as though money was missing at their branches.

A public inquiry into what has been described as the most widespread miscarriage of justice in British history is ongoing.

Anger at the treatment of subpostmasters grew after an ITV drama returned the issue to the spotlight, which prompted the Government to last month promise a new law so those wrongly convicted are ‘swiftly exonerated and compensated’.

Top Whitehall official Sarah Munby stressed it was ‘not true’ that she ‘made any instruction, either explicitly or implicitly, to Mr Staunton to in any way delay compensation payments’

In Mr Staunton’s memo of his first meeting with Ms Munby, which he is said to have discovered in his personal emails yesterday, he recalls laying out the financial challenges facing the Post Office.

It read: ‘She said we needed to know that in the run-up to the election there was no appetite to “rip off the band aid”. “Now was not the time for dealing with long-term issues”.

‘We needed a plan to “hobble” up to the election.’

According to The Times, the note suggested that Ms Munby was referring to the Post Office’s overall finances.

But Mr Staunton said that by far the two biggest items where the Post Office was able to vary its spending were compensation payments and replacement of the Horizon system.

In her letter to Mrs Badenoch, published on the Government website tonight, Ms Munby wrote: It is not true that I made any instruction, either explicitly or implicitly, to Mr Staunton to in any way delay compensation payments.

‘I did not. Neither Mr Staunton’s note, nor the contemporaneous note that my office made, suggest otherwise.

‘In fact, no mention of delaying compensation appears in either note.’

A Government spokesperson said: ‘Sarah Munby’s letter sets the record straight on her exchange with Mr Staunton.

‘Neither of the records taken at the time suggest the Government – either at official or ministerial level – wanted to slow down or delay compensation payments to postmasters, as the Secretary of State said on Monday.

‘Funding for compensation is separately ringfenced expenditure, and is not accessible to the Post Office for any purpose other than compensation payments.

‘This is a distraction from the important work to continue to deliver for postmasters, which the Business Secretary is focused on.’

The Liberal Democrats demanded a investigation by Prime Minister Rishi Sunak’s ethics adviser into whether Mrs Badenoch broke ministerial rules

The Liberal Democrats have demanded a investigation by Prime Minister Rishi Sunak’s ethics adviser into whether Mrs Badenoch broke ministerial rules by branding Mr Staunton’s allegations about being told to stall compensation payments as ‘completely false’.

The party’s deputy leader Daisy Cooper said: ‘Time and again Conservative ministers have undermined the integrity of our politics.

‘Now, this row embroiling Kemi Badenoch raises a whole series of new questions to which we urgently need answers.

‘If Badenoch misled Parliament then she clearly breached the ministerial code. Subpostmasters – who are at the heart of this whole scandal – deserve justice, financial redress and the truth.’

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