Ex-Post Office chair says government told him to delay compensation for postmasters until election

Henry Staunton said he shot back: ‘I’m having no part of it.. it’s not the right thing to do’

The business secretary has accused the former chairman of the Post Office of “lies” after he said he was told to “stall” on compensation for subpostmasters ahead of the general election.

In a dramatic new development in the scandal, Henry Staunton, who was ousted last month after less than a year in the role, said he had been told to allow the Tories to “limp into” the vote.

But Kemi Badenoch hit back accusing him of "lies" and said he had been removed from his post because of "concerns over his conduct".

She sacked him last month amid increasing public pressure after an ITV drama highlighted the appalling miscarriage of justice.

Hundreds of postmasters were wrongfully prosecuted over a decade and a half because of faulty IT software, called Horizon. The estimated final compensation bill is around £1bn.

In an extraordinary intervention, Mr Staunton, the former boss of WH Smith, said a senior civil servant suggested holding back compensation ahead of the election.

He told The Sunday Times: “Early on [in the role], 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.”

Labour said it would seek “answers” in the row in parliament this week.

Ms Badenoch is expected to make a statement to MPs on the issue on Monday. She hit back at the claims, which the government has denied, in a lengthy post on X, formerly known as Twitter.

She said his comments in the interview were a “disgraceful misrepresentation of my conversation with him and the reasons for his dismissal.

“Henry Staunton had a lack of grip getting justice for postmasters. The serious concerns over his conduct were the reasons I asked him to step down.

“That he chose to run to the media with made up anecdotes and a series of falsehoods, confirms I made the correct decision.”

She said her call with Mr Staunton “was with officials” who took a “complete record”. “He has given an interview full of lies about our conversation during his dismissal. The details will emerge soon enough as I won’t let the matter rest here, but will be discussing with (government) lawyers,” she added.

A government spokesperson said: “We utterly refute these allegations.”

Ministers had sped up compensation payments and encouraged other postmasters to come forward with claims, while Mr Staunton was set concrete objectives “to focus on reaching settlements with claimants – clear evidence of the government’s intent,” they said.

MPs also expressed concern about other compensation schemes. Labour MP Jess Phillips said of the claims: “It should be plainly obvious to anyone with eyes that this is true, just as it is true with the contaminated blood scandal compensation.”

The drama, Mr Bates vs The Post Office, highlighted the long legal fight for justice by subpostmasters.

Many, including leading campaigner Alan Bates, have since complained about unnecessary delays to victims in receiving compensation.

More than 700 branch managers were prosecuted by the Post Office between 1999 and 2015 after the accounting software made it look as though money was missing from their shops.

Shadow business secretary Jonathan Reynolds said: “These are incredibly serious allegations. Under no circumstances should compensation to victims be delayed and to do so for party political purposes would be a further insult to subpostmasters.”

Liberal Democrat leader Ed Davey said: “These allegations are deeply disturbing and ministers must come to parliament and explain exactly what has happened at the earliest opportunity.

“The victims of this horrific miscarriage of justice need swift and fair compensation. It is the least they deserve.”

Illegal migration minister Michael Tomlinson said the allegations were “not something that I accept or recognise”.

He told Times Radio: “It’s right to say the whole government has been encouraging subpostmasters to come forward to claim the compensation that they deserve, after what was the biggest travesty of justice that we’ve seen. And we’re encouraging postmasters to come forward and claim the compensation that they deserve.”