The following Answer to an Urgent Question was given in the House
of Commons on Monday 29 January. “Following a conversation with the
Secretary of State for Business and Trade over the weekend, Henry
Staunton agreed to step down as chairman of the Post Office. An
interim chair will be appointed shortly, and a recruitment process
for a new chair will be launched in due course, in accordance with
the governance code for public appointments. I will update the
House when we...Request free trial
The following Answer to an Urgent Question was given in the House
of Commons on Monday 29 January.
“Following a conversation with the Secretary of State for
Business and Trade over the weekend, Henry Staunton agreed to
step down as chairman of the Post Office. An interim chair will
be appointed shortly, and a recruitment process for a new chair
will be launched in due course, in accordance with the governance
code for public appointments. I will update the House when we
have further details.
The current chairmanship was not proving effective, and we had a
difficult decision: change course, or wait and hope that it
improves. Given the challenging context for the Post Office and
the importance of the role of chair, the Business Secretary took
decisive action. I understand that Members would like more
details around the decision, especially considering that the Post
Office is rightly under heightened scrutiny at this time. I can
confirm that there were issues beyond the handling of the Horizon
scandal, but as honourable Members would expect, I am not able to
comment on the specifics of individual human resources cases.
As the Business Secretary has said, Post Office governance is a
priority for the Government. The Post Office is a public
corporation; as such, the Post Office board has responsibility
for the strategic direction of the company. While there was a
clear need for new leadership of the board, we continue to have
confidence in the other board members, who are experienced
executives with a range of business expertise across the legal,
financial, insurance, asset management and pensions sectors;
there are two elected postmaster non- executive directors,
too.
The Post Office faces unprecedented challenges. It needs to work
at pace to deliver compensation to the thousands of postmasters
who fell victim to a faulty IT system, as well as to continue the
essential work to implement the necessary operational and
cultural changes needed in the business. As such, strong and
effective leadership of Post Office Ltd is a necessity”.
3.33pm
(Lab)
My Lords, I will follow up on the questions asked in the other
place yesterday. When responding to a Post Office Question last
week, the Minister said that this whole debacle and scandal had
shown the Post Office in a good light—not Post Office Ltd but the
postmasters and postmistresses. We agree with that. What changes
was the Secretary of State looking to achieve in the removal of
the chair, and what is the timeline for rebuilding trust in Post
Office Ltd?
The Parliamentary Under-Secretary of State, Department for
Business and Trade and Scotland Office () (Con)
I thank the noble Lord for that question. To clarify, the
question was whether the Post Office brand was damaged. Many
people would say that it was a toxic brand. My argument was
simply that if one believes that the real Post Office is actually
the postmasters, they are the heroes of the day. If anything,
their brand has been enhanced but there is no doubt that the
management and oversight of the Post Office has been seriously
compromised over many years.
Perhaps we should remind ourselves how this company operates,
which is on an arm’s-length basis. It is owned by the
Government—the taxpayer—and there is one shareholder: HMG. Yet,
like many of our public bodies, it is now managed on an almost
separate, arm’s-length basis. In doing so, a board is created
that looks like a public company, but when is a public company
not a public company? It is when there is a board that does not
do the job it is meant to be doing.
There was an executive management team, and the role of
non-executive directors is to challenge that team. The role of
the chairman is, principally, to represent the shareholders and
to call the executive management to account. Clearly, that has
not happened here. Since 2015, a whole new set of executive
managers has been put in place, as well as a new board. In 2023,
there were three new independent directors. We have the chair,
and through the increased scrutiny resulting from the Government
perhaps being more interventionist, some disagreements within the
board have come to light. The Secretary of State believes that
the current arrangements are not working, so it was agreed by
mutual consent to part company. We have taken decisive action to
change course and improve, rather than to wait and hope that the
situation improves.
(LD)
The Minister’s answer is really helpful, because the question is,
when is arm’s-length not arm’s-length? It is clear that it has
ceased to be an arm’s-length operation, rightly or wrongly. His
Majesty’s Opposition asked for a timetable, and it would be
helpful if the Minister gave it to us. How much leeway will the
new chair have to do what he or she needs to do, in their mind,
to achieve the objectives, and how much will that arm’s-length
relationship be pulling the chair back?
(Con)
To clarify, the Post Office is constitutionally set up to be
arm’s-length and will remain so. We are now talking to the
Secretary of State about tightening the governance of that. The
key position is the chair, who runs the board and is accountable
to the shareholders. We will appoint an interim chair as soon as
possible, with a view to getting a new person in post this year.
That will coincide, I hope, with the inquiry coming through at
the end of the year.
(Lab)
On 22 January, I tabled a Written Question about possible
conflicts of interest associated with the position of Henry
Staunton, the former chairman of WH Smith, which operates Post
Office franchises. I have yet to receive and Answer. Mr Staunton
has now gone—nothing to do with me, I am sure. First, can the
Minister publish the conflict-of-interest assessment made when Mr
Staunton was first appointed as chair of the Post Office?
Secondly, can the Minister explain how it is that Simon Jeffreys
is a director of the Post Office and the Crown Prosecution
Service? How did that happen?
(Con)
I thank the noble Lord for those questions. The removal—the
resignation by mutual consent—of the chairman, Mr Staunton, is
clearly an ongoing HR issue and we have been clear that we are
not going to comment on that in public. That will now take place
and no compensation will be paid, but that is still in process in
terms of taking action. As far as the rest of the board is
concerned, we are happy with the three new non-executive
directors who came in in 2023. We have two sub-postmaster
representatives, and we are looking for a senior independent
director, which will further strengthen the board.
(LD)
In the Commons on 10 January, the Prime Minister promised that
postmasters would be cleared and compensated swiftly. That same
day, Minister said at the Dispatch Box
that all compensation should be paid by August, which is
encouraging after many years of delay. However, last Sunday, the
Secretary of State said on the BBC that setting
a deadline is “not a priority” and that getting the money out and
sorting out the governance of the Post Office is the critical
thing. Which is it—that the compensation should be paid by
August, or that a deadline is not a priority?
(Con)
I thank the noble Baroness for her question. We have to clarify
that what we are doing here is separating their compensation, so
that it is done as immediately and expeditiously as possible.
Then we will do fact-finding through the inquiry and
accountability will follow. The Prime Minister and Secretary of
State have said that there will be no deadline put in place,
partly because this is a complex process that requires the
postmasters to co-operate and come forward. Of the 2,417
postmasters in the HSS scheme, 100% have received offers, of
which 80% have been accepted. We are making great progress.
(Lab)
My Lords, on the issue of how long the arm between the Government
and the Post Office was, in 2020, following a High Court decision
against the Post Office, experts on electronic evidence were
invited by the Government to suggest changes to the legal
presumption that computers are reliable. That lies at the heart
of this case. To whom did those experts report, was the Post
Office consulted about whether the recommendations should come
into force and why have the recommendations never even surfaced,
let alone been put into force?
(Con)
I thank the noble Lord for his question. I know that he is well
versed in these matters. As we have discussed in the House
before, there will be many ramifications from this case when the
facts come out, one of which, as the noble Lord highlighted, is
this presumption that the computer is always right, which clearly
was not the case. I would have to refer to MoJ colleagues to find
out exactly what happened in that case. The judgment was given in
the Appeal Court in 2019 and the inquiry was set up in 2020. In
2021, when the convictions were overturned, the inquiry became a
statutory inquiry. Under a statutory inquiry, we will get to the
bottom of those questions.
(Lab)
My Lords, the chairman oversaw this scandal. Can the Minister
assure us that he will not be given a compensation package that
demonstrates that, if you fail, you get paid?
(Con)
The chairman who is just leaving was not the chairman pre-2015
and he is not receiving any compensation.
(Lab Co-op)
My Lords, I am perplexed: the Statement said that the chairman
left by mutual agreement, the Minister spoke earlier about his
resignation, but the Secretary of State made it clear that she
sacked him. Which was it? Henry Staunton was appointed by a
Conservative Secretary of State, so presumably that was a
mistake, for which the Minister is apologising. How can the
Government make sure that, when they appoint a new chairman, they
will not make the same mistake again?
(Con)
I thank the noble Lord for that. A key part of making these
appointments is to make sure that we have the right people, in
the right place, and the right leadership. In this case, we
agreed to part company by mutual consent. The point is that there
are issues with the governance of the Post Office beyond Horizon.
There needs to be further reform of the Post Office and we have
to start with the chairman to move that forward.
(LD)
My Lords, the Minister said that it was hoped that the
appointment would be made as soon as possible, hopefully this
year. In the meantime, this organisation is a burning platform;
it needs leadership. Where does the Minister expect that
leadership to come from until the appointment is made?
(Con)
The assessment at the moment is that, with the strengthening of
the non-executive directors and the current executive team in
place, we have a team that can continue to manage the Post
Office. We believe that we have a situation that is stable, but
it now needs to be improved. That is the challenge before us.
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