Former Post Office chairman Henry Staunton was being investigated over bullying allegations before his dismissal, the Business Secretary has told MPs.
Kemi Badenoch 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.
Ms Badenoch’s remarks came during a Commons statement in which she rejected a series of claims made by Mr Staunton, including that he was told by a senior civil servant to “stall” spending on compensation to subpostmasters ahead of the next general election.
Mr Staunton, who was sacked by the Business Secretary last month, used a Sunday Times interview to suggest that the alleged request was linked to concerns about the cost of Horizon scandal compensation heading into the election.
Mr Staunton took up the Post Office role in December 2022 following nine years as chairman of WH Smith.
On Sunday, the BBC reported a spokesperson for Mr Staunton said his client stood by the accusations made in the Sunday Times and there was no investigation into Mr Staunton.
Speaking in the Commons, Ms Badenoch accused Mr Staunton of making “completely false” accusations and 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. 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.”
On claims to “stall” compensation payments, Ms Badenoch told MPs: “There is no evidence whatsoever that this is true.”
She added: “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.”
For Labour, shadow business secretary Jonathan Reynolds said ministers must ensure claims the Government had looked to stall Horizon compensation payments are “shown to be false in no uncertain terms”.
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 reiterated her denial of the claims and 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 said the Government would not publish all relevant correspondence between the Government and Post Office due to the ongoing inquiry, she did said that ministers would “consider publishing correspondence between departments and Mr Staunton in accordance with Freedom of Information rules”.
More than 700 branch managers were prosecuted by the Post Office between 1999 and 2015 after faulty Horizon accounting software made it look as though money was missing from their shops.
Hundreds of subpostmasters and subpostmistresses are still awaiting compensation despite the Government announcing that those who have had convictions quashed are eligible for £600,000 payouts.
Mr Staunton, in his newspaper interview, had said: “Early on, I was told by a fairly senior person to stall on spend on compensation and on the replacement of Horizon and to limp, in quotation marks – I did a file note on it – limp into the election.
“It was not an anti-postmaster thing, it was just straight financials. I didn’t ask, because I said ‘I’m having no part of it – I’m not here to limp into the election, it’s not the right thing to do by postmasters’.
“The word ‘limp’ gives you a snapshot of where they were.”