Ex-Post Office chair told to delay payments in election run-up, memo suggests

11 months ago 61

A senior civil servant told the former Post Office chairman that in the run-up to the election there was no appetite to “rip off the band aid” in terms of government finances, according to a memo he wrote at the time.

Henry Staunton, who was sacked as chairman of the Post Office last month, has produced a record of the conversation in which he says he was told to delay compensation payments to wrongly convicted post office operators.

Staunton has been embroiled in a row this week with Kemi Badenoch, the business secretary, after making damaging allegations about the government’s handling of the scandal. Staunton alleged that he was ordered to “limp into the election” to save the government money.

On Wednesday, the Times published a contemporaneous note of the conversation which Staunton said he found in his personal emails.

According to his note taken after their first meeting on 5 January 2023, Staunton presented Sarah Munby, then permanent secretary at the Department for Business, Energy and Industrial Strategy, with the difficult financial position the Post Office was in without more government money.

He wrote: “Sarah was sympathetic to all of the above. She understood the ‘huge commercial challenge’ and the ‘seriousness’ of the financial position. She described ‘all the options as unattractive’. However, ‘politicians do not necessarily like to confront reality’. This particularly applied when there was no obvious ‘route to profitability’.

“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.”

Staunton told the Times he wrote the memo that night and emailed it to himself before forwarding a copy to Nick Read, the Post Office’s chief executive, the next day.

Although it suggests that Munby was referring to the Post Office’s overall financial position, Staunton said that by far the two biggest areas where the Post Office could cut spending were compensation payments and replacement of the Horizon system.

A government source said: “The longstanding issues around Post Offices finances are a matter of public record and do not include postmaster compensation which is being fully-funded by the government. Henry Staunton is either confused or deliberately mixing up the two issues.

“Even if we trust the veracity of a memo he wrote himself, and there’s not much to suggest we can, given the false accusations he made about the secretary of state in his original interview, it’s time for Henry Staunton to admit his interview on Sunday was a misrepresentation of his conversations with ministers and officials and to apologise to the government and the postmasters.”

Earlier this week Staunton’s claims triggered a furious response from Badenoch. Speaking in the Commons, she said he was making “wild baseless accusations” in a “blatant attempt to seek revenge”, and claimed that he had been under investigation for bullying when she fired him.

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She argued that it would be “mad” for the government to ask Staunton to delay compensation payments. “We have no evidence whatsoever that any official said this, and actually, if such a thing was said, it is for Mr Staunton himself to bring the evidence,” Badenoch told MPs.

“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.”

Staunton in response stood by his account and said he was never made aware of any bullying investigation. He said there was no “real movement” from the government to speed up compensation until an ITV dramatisation of the scandal increased public awareness of it.

Between 1999 and 2015, the Post Office prosecuted hundreds of post office operators after a faulty computer system, Horizon, made it look as if money was missing. It has come to be seen as one of the worst miscarriages of justice in British history.

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