PARLIAMENTARY DEBATE
Post Office Governance and Horizon Compensation Schemes - 19 February 2024 (Commons/Commons Chamber)
Debate Detail
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.
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 whatsoever 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.
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 cannot stress enough that the last thing that was needed in this scandal was any further allegation of cover-up or obfuscation at the very top of Government. People’s faith in Government, already damaged by scandals such as Hillsborough, Bloody Sunday and Windrush, is hanging by a thread. This miscarriage of justice has shown the devastation that can occur when institutions are allowed to operate without oversight or are shrouded in secrecy. We should all agree that that secrecy must end, and that the full sunlight of public scrutiny should be brought to bear. If everything the Secretary of State has told us today is correct, surely there will be no objection to that happening fully.
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.
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.
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.
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.
The point the right hon. Gentleman made right at the beginning of his question is correct. The points made in the newspapers do undermine the work that we are doing. It was very disappointing to read those statements. It was also disappointing because I had done everything I could to try and keep this out of the news and do it behind closed doors, properly. I made sure when I gave public statements that I said I would not do HR in public. When I found out that it had been leaked to Sky News, I even called Sky News and asked—one of my assistants asked—for that not to be put out in the public domain before I had had a chance to speak to Henry Staunton. I did the same with the Daily Mail, which thankfully did listen. We also need the media to help us in this and not publish false allegations.
“Right now, the Post Office’s No. 1 priority must be delivering compensation to postmasters”.
Does she agree that millions of pounds spent on the Post Office trying to pay innocent sub-postmasters would have been better spent on ensuring that we keep our vital post offices up and down the country?
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