Kemi Badenoch to give evidence to Post Office inquiry
Kemi Badenoch is now about to give evidence to the Post Office inquiry. She will be asked about decisions she took in her capacity as business secretary from February 2023 until the general election.
This meant Badenoch was in post earlier this year when the ITV drama, Mr Bates vs the Post Office, ignited national anger over the scandal and turned it into a much bigger story than it had ever been before. By then some journalists had covering the story for more than a decade, and the facts were already well documented. But until then it had not been at the top of the political agenda, partly because key developments in the story coincided with big events during Brexit, the 2019 election and the Covid pandemic.
Badenoch’s most prominent intervention was to sack Henry Staunton, the Post Office chair earlier this year, soon after the ITV programme was aired. He claimed that she told him he had to go because “someone’s got to take the rap for this [the Horizon scandal]” and that her department wanted to delay compensation payments. But she said his claims were “completely false” and that he was sacked in relation to misconduct allegations. Staunton later said Badenoch was smearing him.
Key events
In the hearing Jason Beer KC is asking Kemi Badenoch about a diagram she was shown in a briefing on the Post Office she was given when she became business secretary.
Badenoch says this does not tell the whole story.
Beer is particularly interested in the line saying it is the job of the UK Goverment Investments (UKGI) representative on the Post Office board to “challenge” Post Office decisions.
Badenoch says she was ‘very angry’ about leak of decision to sack Post Office chair Henry Staunton
Kemi Badenoch has submitted two witness statements to the inquiry. The first is here.
In it, she very strongly defends the decision to sack Henry Staunton as Post Office chair.
She says she received a recommendation saying he should go backed by Kevin Hollinrake, the Post Office minister, and her permanent secretary.
She says the decision to sack him was leaked to the media on Saturday 27 January. This was before Staunton had been told, and she says she was “very angry” about this. She says:
On Saturday 27 January 2024, I was informed that the media had become aware of the decision to remove Mr Staunton. Pausing there, it is right to record that I was and am very angry at the fact that my decision leaked to the media. Leaks of this type debilitate government, and lead to inaccurate reporting making it more difficult to get the truth out. And clearly this was not the right way for Mr Staunton to learn of my decision; I wanted to spare him any public embarrassment. (As Mr Staunton described it in our subsequent call, the leak was “appalling”.)
Upon being informed of the leak, I called Mr Staunton as soon as possible and he answered. We had a brief conversation.
When the news of Staunton’s sacking was leaked, Badenoch was scheduled to be interviewed on the BBC’s Sunday with Laura Kuenssberg the following day.
Badenoch says, when she became business secretary, she had no knowledge of what the problems were with Horizon beyond what a “lay MP” would know.
Q: So, the various legal developments, all the things you were briefed on when you became business secretary in February 2023, they were news to you?
In terms of the detail, yes, says Badenoch. She says until then she had been focused on her other ministerial duties and her work as a constituency MP.
Kemi Badenoch is giving evidence now.
Jason Beer KC starts by asking Badenoch to confirm her witness statements are accurate, and to confirm details of her CV.
Kemi Badenoch to give evidence to Post Office inquiry
Kemi Badenoch is now about to give evidence to the Post Office inquiry. She will be asked about decisions she took in her capacity as business secretary from February 2023 until the general election.
This meant Badenoch was in post earlier this year when the ITV drama, Mr Bates vs the Post Office, ignited national anger over the scandal and turned it into a much bigger story than it had ever been before. By then some journalists had covering the story for more than a decade, and the facts were already well documented. But until then it had not been at the top of the political agenda, partly because key developments in the story coincided with big events during Brexit, the 2019 election and the Covid pandemic.
Badenoch’s most prominent intervention was to sack Henry Staunton, the Post Office chair earlier this year, soon after the ITV programme was aired. He claimed that she told him he had to go because “someone’s got to take the rap for this [the Horizon scandal]” and that her department wanted to delay compensation payments. But she said his claims were “completely false” and that he was sacked in relation to misconduct allegations. Staunton later said Badenoch was smearing him.
Here are some more pictures from the Armistice Day events in Paris attended by Keir Starmer this morning.
Reynolds says he does not accept Post Office has no future, and ‘public demand and policy rationale’ for it still exist
Sir Wyn Williams, the inquiry chair, ended the session with a question for Jonathan Reynolds, the business secretary. He said he had evidence from some witnesses saying the Post Office “cannot be rescued”.
Q: So why do you think it should be rescued.
Reynolds said he thought the public “still want a Post Office”. He went on:
They still want the service it provides. When I go into the post offices in my local community, they’re actually always pretty busy.
As I say, the regret is that I don’t think postmasters are earning appropriate remuneration from that level of business taking place.
When it comes to new initiatives like banking hubs, I think the Post Office has been, and in every case actually has been, the natural partner picked to run that in a local community.
So there was “fundamentally” a need for something like the Post Office, he said. He went on:
I think the big public policy questions – like the future of cash in our society, and the closure of high street banking in many communities – the Post Office is part of the answer to those other wider public policy concerns.
And I do foresee, potentially in future, services that aren’t currently delivered by the Post Office, or the Post Office being a potential vehicle for delivering them.
But I think the future is definitely one that has, to be frank, a significantly smaller centre, and is based much more around power, authority and governance being provided to postmasters on the frontline – really, a central organisation serving those people. I don’t think that’s been the relationship leading into this scandal in particular.
Reynolds said, when post office had to close, there was “genuine regret”.
So I feel both the public demand and the policy rationale is still there, and that underpins these conversations and work that we’re doing on what the future might look like.
Reynolds says he would like to see ‘very significant’ changes to Post Office’s business model going ahead
Reynolds also told the inquiry that going ahead he would like to see “very significant” changes to the Post Office’s business model. He said:
I think the scale of this scandal cannot be separated out from the business model and the governance structure of the Post Office.
So we need, from the work that I lead as secretary of state and what this inquiry is seeking to do, to not just respond to the obvious injustice and the need for redress to follow that, but to understand why, as an institution, the Post Office has gone so wrong and what needs to change in future.
For instance, I believe that is everything from the internal governance structure of the Post Office, right down to the level of remuneration that postmasters receive.
I think despite the scale of this scandal, the Post Office is still an incredibly important institution in national life.
I think it still has an incredible role to play in communities.
I look at the business model of the Post Office, and I think even accounting for the changes in the core services that are provided … there’s still a whole range of services that are really important.
But I don’t think postmasters make sufficient remuneration from what the public want from the Post Office, and I think that’s going to require some very significant changes to the overall business model of the Post Office.
Reynolds says he would consider setting deadline for Post Office compensation payments if it was ‘only way’ to speed up process
This is what Reynolds told the Post Office inquiry when he was asked if he would agree with Sir Alan Bates’ call for next March to be set as a deadline for the payment of compensation to post office operators due redress payments under the GLO (general litigation order) scheme. This scheme, for the 555 people who were part of the legal action led by Bates, is one of four Post Office redress schemes operating.
Asked about the March deadline, Reynolds said:
I’ve thought about this a great deal and obviously anything put forward by Sir Alan in particular is something I’ll consider to a significant degree.
The position I’m in is I’m trying to make sure people get redress for a horrendous scandal … at a minimum, I don’t want to do anything that makes that injustice even worse.
And the worry about a deadline – can you imagine a situation where, for whatever reason, a claim has not come in?
I think it will be unconscionable to say that that is not going to be considered.
But Reynolds also said that, if he thought setting a March deadline was “the only way to speed [claims] up”, it is something he would consider.
Reynolds tells the inquiry that his “personal aspiration” is to publish a green paper on the future of the Post Office in the first half of next year.
Reynolds says mutualisation would have ‘particular advantages’ as future model for Post Office, and no options ‘off the table’
Julian Blake, counsel for the inquiry, has now finished his questions to Jonathan Reynolds.
As he was winding up, he asked Reynolds what his plans were for the future of the Post Office.
Reynolds said governance of the Post Office would have to change.
But he said that first the organisation had to resolve issues like funding. He said it would need to pay for a replacement to the Horizon system. The Post Office needed to be “sustainable”, he said.
But, beyond that, he said, he did not think anything should be “off the table”.
He said mutualisation was one idea that has been discussed. This would have “some particular advantages in terms of dealing with the specific breakdown of trust between different parts of the organisation”.
David Connett wrote this option up for the Observer last month.
