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Kemi Badenoch has said former Post Office chair Henry Staunton was being investigated over bullying allegations before his dismissal – as she accused him of seeking “revenge” against the government.

The business secretary told the Commons that allegations regarding Mr Staunton’s conduct, including “serious matters such as bullying”, were being examined and concerns had also been raised about his “willingness to co-operate” with the formal investigation.

Speaking in the Commons, Ms Badenoch said: “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,” she said. “That was not the reason at all.

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“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.”

But shortly after Ms Badenoch made her statement, a spokesperson for Mr Staunton released a fresh statement hitting back at the “astonishing” claims, saying it was the “first time the existence of such allegations have been mentioned”.

“Mr Staunton is not aware of any aspect of his conduct which could give rise to such allegations,” they added.

“They were certainly not raised by the secretary of state at any stage and certainly not during the conversation which led to Mr Staunton’s dismissal. Such behaviour would in any case be totally out of character.”

The heated exchange came after Mr Staunton, who was dismissed from his post last month, claimed in an interview with The Sunday Times that he was told to delay pay-outs to sub-postmasters ahead of the next general election due to concerns about costs.

Speaking in the Commons, Ms Badenoch said the claim was “completely false” and accused Mr Staunton of seeking “revenge” after he was sacked.

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Henry Staunton
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Henry Staunton

‘Pretty obvious to everyone’

Mr Staunton stood by his claims about stalled compensation this evening and earlier told Sky News it “pretty obvious what was really going on” following the government denials.

Mr Staunton said there was “no real movement” on the payouts until after the airing of the ITV drama Mr Bates Vs The Post Office earlier this year.

He added: “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 was more generous, but we didn’t see any real movement until after the Mr Bates programme.

“I think it is pretty obvious to everyone what was really going on.”

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But Ms Badenoch told MPs this afternoon there was “no evidence whatsoever that this is true”.

“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,” she said.

“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.”

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Post Office scandal: New concerns

As the war of words between the pair ramped up, opposition parties demanded the government release all documents relating to Mr Staunton’s sacking to provide clarity on the allegations.

In his interview with The Sunday Times, Mr Staunton claimed that when he was sacked Ms Badenoch had told him “someone’s got to take the rap” for the Post Office scandal – and that he was offered no apology for learning about his dismissal from Sky News.

A readout of a call between the pair, seen by Sky News, shows that Ms Badenoch did apologise, but only for the call being at short notice.

‘Truly shocking’

As well as denying the claims, the business department also published a letter sent to Mr Staunton after his appointment which said one of his priorities should be to resolve historic litigation issues relating to the Horizon software.

However, Labour described the allegations were “truly shocking” and said there were “clear discrepancies” in the accounts of Mr Staunton’s short time as chairman.

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Post Office accused of cover-up

Mr Staunton became chairman of the Post Office in December 2022, but he was ousted last month as the government reeled from the backlash of its handling of the Horizon scandal.

This saw hundreds of sub-postmasters prosecuted because of discrepancies in the Horizon IT system between 1999 and 2015, in what has been called the biggest miscarriage of justice in UK history.

The airing of Mr Bates Vs The Post Office last month led to widespread outrage and promises from the government to introduce a new law to exonerate all victims and speed up the compensation process.

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Appearing opposite Ms Badenoch in the Commons, shadow business secretary Jonathan Reynolds said the revelations in The Sunday Times “could not be more serious”.

He singled out the claim that the Post Office was “instructed to deliberately go slow on compensation payments” to wrongly convicted sub-postmasters to save the government money ahead of an election.

He added it would be a “further outrageous insult to a scandal that has already rocked faith in the fairness of the British state”, if true.

Mr Staunton claimed he received the direction from a senior figure in Whitehall, but a spokesman for the government said on Sunday it “utterly” rejected the claim and said Mr Staunton was given “concrete objectives” to focus on reaching settlements.

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Labour MPs already angry over claim Mandelson’s appointment was ‘worth the risk’

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Labour MPs already angry over claim Mandelson's appointment was 'worth the risk'

If you want to know why so many Labour MPs are seething over the government’s response to the Mandelson saga, look no further than my mobile phone at 9.12am this Sunday.

At the top of the screen is a news notification about an interview with the family of a victim of the notorious paedophile Jeffrey Epstein, saying his close friend Peter Mandelson should “never have been made” US ambassador.

Directly below that, a Sky News notification on the business secretary’s interview, explaining that the appointment of Lord Mandelson to the job was judged to be “worth the risk” at the time.

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Peter Kyle went on to praise Lord Mandelson’s “outstanding” and “singular” talents and the benefits that he could bring to the US-UK relationship.

While perhaps surprisingly candid in nature about the decision-making process that goes on in government, this interview is unlikely to calm concerns within Labour.

Quite the opposite.

More on Peter Kyle

For many in the party, this is a wholly different debate to a simple cost-benefit calculation of potential political harm.

As one long-time party figure put it to my colleague Sam Coates: “I don’t care about Number Ten or what this means for Keir or any of that as much as I care that this culture of turning a blind eye to horrendous behaviour is endemic at the top of society and Peter Kyle has literally just come out and said it out loud.

“He was too talented and the special relationship too fraught for his misdeeds to matter enough. It’s just disgusting.”

There are two problems for Downing Street here.

The first is that you now have a government which – after being elected on the promise to restore high standards – appears to be admitting that previous indiscretions can be overlooked if the cause is important enough.

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Government deeming Mandelson to be ‘worth the risk’ is unlikely to calm Labour MPs

Package that up with other scandals that have resulted in departures – Louise Haigh, Tulip Siddiq, Angela Rayner – and you start to get a stink that becomes hard to shift.

The second is that it once again demonstrates an apparent lack of ability in government to see around corners and deal with political and policy crises, before they start knocking lumps out of the Prime Minister.

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Sir Keir Starmer is facing questions over the appointment and subsequent sacking of Lord Mandelson as the UK’s ambassador to the US.

Remember, for many the cardinal sin here was not necessarily the original appointment of Mandelson (while eyebrows were raised at the time, there was nowhere near the scale of outrage we’ve had in the last week with many career diplomats even agreeing the with logic of the choice) but the fact that Sir Keir Starmer walked into PMQs and gave the ambassador his full-throated backing when it was becoming clear to many around Westminster that he simply wouldn’t be able to stay in post.

The explanation from Downing Street is essentially that a process was playing out, and you shouldn’t sack an ambassador based on a media enquiry alone.

But good process doesn’t always align with good politics.

Something this barrister-turned-politician may now be finding out the hard way.

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Man admits arson after major fire at MP Sharon Hodgson’s constituency office

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Man admits arson after major fire at MP Sharon Hodgson's constituency office

A man has admitted arson after a major fire at an MP’s constituency office.

Joshua Oliver, 28, pleaded guilty to starting the fire which destroyed the office of Labour MP Sharon Hodgson, at Vermont House in Washington, Tyne and Wear.

The fire also wrecked a small charity for people with very rare genetic diseases and an NHS mental health service for veterans.

The guilty plea was entered at Newcastle Magistrates’ Court on the basis that it was reckless rather than intentional.

Hodgson, who has been an MP since 2005, winning her seat again in 2019. Pic: Reuters
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Hodgson, who has been an MP since 2005, winning her seat again in 2019. Pic: Reuters

The Crown did not accept that basis of plea.

Oliver, of no fixed address, had been living in a tent nearby, the court heard.

Northumbria Police previously said it was “alerted to a fire at a premises on Woodland Terrace in the Washington area” shortly after 12.20am on Thursday.

“Emergency services attended and no one is reported to have been injured in the incident,” it added.

Drone footage from the scene showed extensive damage to the building.

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A spokesperson for the Crown Prosecution Service said: “Our prosecutors have worked to establish that there is sufficient evidence to bring the case to trial and that it is in the public interest to pursue criminal proceedings.

“We have worked closely with Northumbria Police as they carried out their investigation.”

Oliver was remanded in custody and will appear at Newcastle Crown Court on Tuesday, 14 October.

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Why sacking Lucy Powell might come back to haunt Starmer

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Why sacking Lucy Powell might come back to haunt Starmer

Sir Keir Starmer may end up regretting sacking Lucy Powell.

The former Commons leader, who has been described as “scrappy” and a “formidable” organiser with connections right across the Labour Party, will take on Education Secretary Bridget Phillipson in the race to replace Angela Rayner as deputy leader following her dramatic resignation from government.

Ms Powell’s presence on the ballot paper, confirmed on Thursday night after she won the backing of 117 MPs, turns the internal battle into an effective referendum on the prime minister’s leadership, at a time when the mood in the party likely reflects the wider mood in the country.

The Manchester Central MP, who previously served as an aide to Ed Miliband, was part of a contingent of North West MPs who were sacked in last week’s reshuffle.

Sky News understands that Ms Powell asked the prime minister three times why she was being removed from her post – but did not receive an answer.

She has emerged as the backbenchers’ candidate, in contrast to Ms Phillipson, the loyalist education secretary, who is seen as Number 10’s choice. It is a label that may prove to harm rather than help the cabinet minister’s chances.

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What Labour needs in a deputy PM

After her place on the ballot was confirmed, Ms Powell called for a “change of culture” in Downing Street.

“We’ve got a bit of a groupthink happening at the top, that culture of not being receptive to interrogation, not being receptive to differing views,” she told The Guardian newspaper.

Allies of Ms Powell say it is her ability to engage with MPs and network that has landed her on the ballot paper, and she is also a beneficiary of the prime minister’s poor handling of his own party, evidenced by the way he handled the reshuffle – not to mention other mishaps over the past year regarding winter fuel payments and welfare.

‘Inept people management’

Many of the ministers who were sacked expected to receive a phone call from Sir Keir himself, but Sky News understands they instead received the news through either Darren Jones, his chief secretary, or Jonathan Reynolds, the former business secretary who was himself demoted to chief whip.

One minister who spoke to Sky News said it was not Sir Keir who told them they were being sacked.

“It’s inept people management that is going to come back to bite him,” they said.

“There’s a lot of people who see this deputy leadership contest as an opportunity to reinforce that point.

“People need a way to air their concerns, and if the debate is shut down because there isn’t a contest, it will just explode later on at a much higher volume.”

Labour insiders say Sir Keir’s lack of personal touch has fuelled “resentment and revenge” in the PLP that will directly benefit Ms Powell – with one saying Sir Keir had turned her into a “martyr”.

They draw parallels with the government’s mishandling of internal splits over Gaza which resulted in a large rebellion while in opposition, and more recently the uproar over welfare cuts that was only minimised when Ms Rayner was brought in to bridge the gap with MPs.

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Why the Labour deputy leader race is important

Powell a ‘shop steward’ of the PLP

Karl Turner, the Labour MP for Hull East, told Sky News he believed that sacking Ms Powell actually strengthened her chances in the race.

“Lucy Powell will, I am sure, prove to be the most popular candidate amongst ordinary members once the contest is opened up because members will see her as not being the choice of Downing Street,” he said.

“I have no doubt that Keir Starmer saved the Labour Party from itself not too many years ago, but I am worried that we are in danger of losing the entire Labour movement unless we change stance, fast.”

He added: “I’m supporting Lucy Powell because I know she will be the shop steward for the PLP. Lucy is fearless and will speak truth to power without fear or favour. We must act fast as a political party and absolutely must not allow this deputy leadership contest to become a referendum on the prime minister’s premiership.”

Another backbencher summed up the contest as a chance to give Sir Keir “a bloody nose”, while a separate source said removing Ms Powell was “utterly egregious”.

“It’s given Andy Burnham the biggest energy boost.”

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Andy Burnham on deputy leader race

As well as mobilising the PLP, Ms Powell’s sacking has fuelled speculation of a comeback for Andy Burnham, the mayor of Greater Manchester who is her close friend and has long been known to harbour leadership ambitions.

There is speculation that should a Manchester MP stand down, Mr Burnham may be inclined to run in the ensuing by-election.

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What do unions want from Labour’s new deputy?

Mr Burnham has not given any indication that he is planning to run again for parliament but has also not ruled out a return to Westminster in the future.

Such a scenario would present the ultimate crisis for Number 10 – long suspecting the openly critical mayor has designs on the prime minister’s job.

Number 10 would be forced to choose between allowing Mr Burnham to run in the by-election and thus make it easier for him to launch a potential leadership challenge, and blocking him from the ballot paper and risk gifting the seat to Reform, while causing an outcry among MPs.

Some have been at pains to point out that this deputy leadership contest is not about the heart and the soul of the Labour Party – and Ms Powell has stressed her time serving in government – it is about Sir Keir’s leadership.

As one union source put it: “If Lucy can run this as a referendum on the direction of the government, she’d win.”

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