The former chairman of the Post Office lobbied to double the pay of the chief executive even as Horizon compensation schemes faltered and the company descended into chaos.
Henry Staunton twice asked ministers in the Department for Business and Trade to increase the pay of Nick Read but was rebuffed on both occasions, MPs have heard.
It came as Rishi Sunak declined to back Read after it was confirmed that he was under investigation for misconduct. At prime minister’s questions Sunak said that it would be “inappropriate” to comment before the investigation has been completed.
Last year Read was paid £436,000 plus bonuses, and in the past two years has collected close to £1.4 million.
To cries of “wow”, Kevin Hollinrake, the postal affairs minister, told MPs on Wednesday: “On two occasions Mr Staunton lobbied for a pay increase for Mr Read — he sought to double the overall package on those occasions.”
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Jane Stevenson, a former minister in the business department, said the demands for a pay rise were “galling”.
Tim Brentnall, who was wrongly convicted over shortfalls from his till, said on Tuesday that his Post Office made profits of “just under £20,000” in the years before he became embroiled in the Horizon scandal, while Tony Downey, who fled the country after he was bankrupted, earned £26,000 per year from his branch.
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An MP on the business committee described the remuneration as “a pittance” and “absolutely horrendous”.
Staunton, who was sacked in January, claimed that Read had even considered resigning because he was unhappy with his pay packet, which is capped at £819,210 per year including bonuses.
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Read was also considering stepping back because the investigation into his conduct, initiated by an 80-page complaint filed by a disgruntled former HR director, had taken “a terrible toll on me and my family”, Staunton told the committee on Tuesday.
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Staunton claimed that Read had considered resigning four times. Ben Tidswell, the senior independent director, responded to the claims in an email to postmasters: “To my knowledge Nick Read has never tendered his resignation and he continues to accept leadership responsibility for the challenges that we are all working on each day.
“Post Office has received a complaint against a number of people within the organisation — Nick is one of those employees — and I am sure you will all agree that Post Office should investigate every complaint with due process. Nick accepts this and has co-operated fully with the investigation.”
Downing Street also repeatedly refused to endorse claims, made by Kemi Badenoch on the floor of the Commons on February 19, that Staunton was being investigated for bullying.
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Badenoch, the business secretary, said that Staunton was facing a “formal investigation” into allegations about his conduct. “This included serious matters such as bullying,” she said.
Staunton told MPs on Tuesday that the claim was misleading because the primary subject of the investigation was Read and allegations raised about him related to “politically incorrect comments”, not bullying.
Asked whether Badenoch’s claim that Staunton was being investigated for bullying was correct, the prime minister’s official spokesman said: “I’m not going to get into any further commentary on HR matters.”
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Hollinrake, responding to the same question in the Commons, said it would have been “wrong” for Badenoch to disclose an investigation into someone’s work conduct before it had concluded.
He said Staunton’s comments were “highly unprofessional” and the former chairman’s move to interfere in the investigation “into someone’s conduct, his own conduct,” was part of the reason he was sacked.
Other MPs spoke of their distaste over scenes of executives slogging it out at a select committee just hours after postmasters told of their years-long fight for redress.
Marion Fellows, the SNP chairwoman of the all-party parliamentary group on the Post Office, said: “Victims and the public have lost faith in the Post Office board and governance, when over £1.2 billion of public money is being spent on financial redress, the taxpayer ought to have confidence that costs will not be driven up further by mismanagement.”
