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Kemi Badenoch and the former Post Office chair were locked in a war of words on Monday, as the business secretary accused Henry Staunton of making “wild, baseless allegations” about the government’s handling of the Horizon scandal.
Badenoch lashed out in parliament at Staunton’s claims that he was officially advised to delay compensation payments to sub-postmasters who were wrongly convicted in cases involving the faulty IT system.
In an excoriating and highly unusual attack by a minister on a high-profile business figure, Badenoch described the comments by Staunton, who was sacked last month, as a “disgrace” and a “blatant attempt to seek revenge after a dismissal”. She added that he had no evidence for his allegations.
Staunton fired back in a statement, warning that he had noted the request to stall compensation in an internal email to colleagues, which would be identifiable on the Post Office server system.
“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,” he said, referring to the ITV dramatisation of the scandal this year.
“We will leave it to others to come to the conclusion as to why that was the case,” the statement said, adding: “Mr Staunton is not in the habit of resorting to fabrication or invention.”
Staunton said on Sunday he had been summarily fired from his role last month by Badenoch, whom he alleged said “someone’s got to take the rap” for the IT scandal.
Formerly chair of stationery retailer WHSmith, Staunton also claimed in an interview with the Sunday Times he was told by a civil servant to stall compensation payments to Horizon victims so that the government would be able to “limp into the election” without huge payouts to fulfil.
In a statement in the House of Commons, Badenoch said she had dismissed Staunton “because there were serious concerns about his behaviour as chair”, noting allegations that he had tried to bypass a public appointment process and that serious claims were raised about “bullying”.
On Monday, Staunton denied Badenoch’s claim he sought to bypass board appointment processes and said her remarks concerning alleged bullying had not previously been raised with him.
The business department was contacted for comment about Staunton’s statement.
More than 900 sub-postmasters were convicted in cases involving data from Fujitsu’s faulty Horizon IT system following its introduction in 1999, including more than 700 brought by the Post Office itself.
Thousands more postmasters were affected after they were pursued for account shortfalls, while the government has to date paid out at least £138mn of the £1bn it has set aside for compensation. Many of the victims are still awaiting compensation offers.
Jonathan Reynolds, shadow business secretary, called for a Cabinet Office investigation into the claims made by Staunton, and for all correspondence between Badenoch’s department and the Post Office on the topic to be published.
Reynolds said faith in government had been rocked by scandals such as Bloody Sunday and the Windrush affair, and that Staunton’s comments would cause further concern, including to victims of the contaminated blood scandal.
The government has also been accused of dragging its feet over that scandal — in which tens of thousands of people were infected with HIV and hepatitis C through tainted blood transfusions — but is expected to set out details of a final, massive compensation scheme for victims in the coming weeks.
Badenoch said her department would publish a readout of the conversation she held with Staunton when he was dismissed, and would “consider” publishing correspondence between the government and Staunton under Freedom of Information rules.
She said she would not publish correspondence between her department and the Post Office, which was subject to the continuing Horizon public inquiry.
Downing Street declined to say whether Badenoch had shown Prime Minister Rishi Sunak an official account of her conversation with Staunton last month, in which she sacked him, and denied Staunton had been told to stall compensation payments to postmasters.
“We refute the allegations he made,” said Number 10, adding that Staunton was sacked over “serious concerns around his conduct and his ability to deliver justice to postmasters”.
“For the government’s part, we acted to speed up compensation for victims,” it said, adding that Badenoch had been clear that Staunton’s account of their conversation was “a misrepresentation”.
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