The Conservative leader, Kemi Badenoch, has told an inquiry it is “extremely disappointing” that it took the ITV drama about the Post Office scandal to get the government to accelerate compensation payments for wrongfully prosecuted branch owner-operators.
Badenoch, the new leader of the opposition who held the post of business secretary for 17 months until the general election, said she and her then postal minister, Kevin Hollinrake, had been working behind the scenes to get the Treasury to sign off on funding for more rapid and generous payouts for post office operators affected by the Horizon IT scandal.
Badenoch appeared before the public inquiry into the scandal on Monday. The inquiry was shown a letter she sent in August 2023 to the then chancellor, Jeremy Hunt, asking for funding to increase payments to improve the compensation schemes.
In response, he rejected the request and “encouraged” her “to explore the full breadth of other options”.
“I was not expecting the documentary [the ITV drama Mr Bates vs the Post Office] in January, which helped speed things along,” said Badenoch. “It suddenly turned it from a value-for-money question to a public perception question.
“It is not enough to do the right thing. You have to be seen to be doing the right thing. Many people had not known the arguments [already] taking place behind the scenes at Whitehall. Work was being done but no one was seeing what was taking place.”
Badenoch said the TV drama “changed the priority of the [Horizon] issue, which was behind the NHS and security and so on, to something we needed to solve now. It raised the prioritisation.”
Jason Beer, counsel for the inquiry, said it was “disappointing” to hear that it took a TV drama to get the government to change its priorities in relation to the scandal.
“It is extremely disappointing,” said Badenoch. “I think if you look at it in the context of what is happening in government, there are a thousand things money is being requested for. After a while decision-makers become very dispassionate. It becomes another line in the ledger.
“It is not irrational but it has to change, it is not helpful either. There is an absence of common sense in a lot of Whitehall. They don’t trust their judgment. People want legal cover.”
As business secretary, Badenoch sacked the Post Office chair Henry Staunton in a move that led to a public disagreement over the handling of the Horizon scandal.
The leadership of Nick Read, the outgoing Post Office chief executive, has been frequently criticised throughout the inquiry.
Last week Hollinrake said Read was “paid lots whilst not doing a very good job”, and that working with him was like “drawing teeth”.
Badenoch defended Read, saying she thought he was “doing his very best” and that the media unfairly “personalised their reporting” to make him something of a scapegoat.
“I do not think he was a bad chief executive,” she said. “I saw someone trying to do his best. Kevin [Hollinrake] had a different view, we are all entitled to our opinions. On balance, he did a good job in very difficult circumstances. I formed the impression that he cared about the organisation and was doing his very best. He has been given a particularly tough time trying to sort out a mess that was not of his making, and I feel he has unfairly borne the brunt.”
Badenoch said the Post Office was built to thrive in a pre-internet age but that she felt it remained an “essential cultural institution”.
“If it was a private organisation it would have disappeared in its current form long ago,” she said. “But we are keeping it alive. The result is that it is in a permanent state of stress. The challenge is where we find the money [to keep funding it]. Should we have a Post Office? Yes, it is a cultural institution essential for us to keep.”
