Lord Arbuthnot of Edrom

Just over £1bn has been committed by Government to ensure postmasters are compensated fairly. This funding covers the three Horizon compensation schemes: the Overturned Convictions scheme, the Group Litigation Order Scheme, and the Horizon Shortfall Scheme. Funding is agreed by HM Treasury at the relevant Estimate on the basis of the Department for Business and Trade’s forecasts for compensation.

A provision was made in the 2022/23 accounts of the Department of Business, Energy & Industrial Strategy (BEIS). Provisions should not be seen as an indication of the total amount of money available for compensation or how much claimants will receive; they are an estimate based on the latest information available.

The total discounted liability as at 31 March 2023 for sub-postmasters affected by issues arising from the Horizon software system was estimated at £600 million. This provision has subsequently transferred over to the Department for Business and Trade (DBT) and an updated value will be reflected in the department’s 2023-24 annual report and accounts to reflect policy announcements and changes since last years accounts.

Provision values will not include compensation paid to date. Annual accounts are produced on an accruals basis and compensation payments are recognised on this basis.

Under its Articles of Association, the Post Office is required to gain prior written consent from the Shareholder before entering into a transaction which involves the incurrence of a commitment, liability or payment of a sum in excess of £50 million. Officials have checked our records and have seen no evidence of any such written consent.

The Met Office is responsible for advising the Government of the likelihood and impact of Severe Space Weather, such as coronal mass ejections. An event like that of 12 March travelling towards Earth would have global impacts on key sectors including energy, telecommunications and transport. The Met Office Severe Space Weather Scales set out further information on the potential impacts.

The National Security Risk Assessment includes the reasonable worst case scenario assessing the impacts of severe space weather phenomena, such as solar flares, on essential services. This was updated in 2022 and reflects the latest scientific and engineering knowledge, including appropriate historical data from the Carrington Event.

Met Office modelling suggests that the coronal mass ejection of 12 March 2023 erupted from the far-side of the Sun travelling away from the Earth, at a similar speed to the Carrington event of 1859.

In principle, Post Office will be permitted to demand confidentiality; however, this is a legal matter and will be addressed on a case-by-case basis.

BEIS Secretary of State is the 100% shareholder of Post Office and in this capacity he has agreed to help fund the Historical Shortfall Scheme and to fund the compensation for postmasters with overturned Horizon-related convictions.

An initial estimate of £233 million of maximum budget cover from the Government for Historical Shortfall Scheme compensation payments was published by BEIS, as is required, on the TCA subsidy website. This was an estimate of maximum budget cover potentially required from Government and is not an estimate of likely outturn in settlement costs. The £153 million provision included in the 2019/20 Post Office accounts provides the best estimate of likely overall compensation spend under the Historical Shortfall Scheme, some of which will be paid by Post Office and some of which will be paid by Government.

BEIS also published on the TCA subsidy website an estimate of maximum potential Government spend of £780 million to cover both the interim payments of up to £100k to be paid within 28 days of an overturned Horizon-related conviction and the final settlements for these postmasters. This is not, however, an estimate of the likely spend on these settlement costs. Actual compensation costs for postmasters with overturned criminal convictions will be determined by the total number of overturned convictions over time and the individual settlements reached. As was the case on the Historical Shortfall Scheme, I expect that Post Office will publish a more accurate estimate of these compensation costs as a provision in its forthcoming annual report and accounts.

Post Office Limited confirmed in its Annual Report and Accounts in March 2021 that it is a going concern. The next Annual Report and Accounts should be published before the end of March 2022

Cases being subject to the Alternative Dispute Resolution process are being handled in parallel.

The Government will monitor the Post Office’s progress on compensation cases as well as the approach being taken when making offers of compensation and track for consistency and fairness. Furthermore, a QC or other suitably qualified legal professional will review the proposed approach for assessing claims for at least an initial cohort of cases, and will be available to advise POL and the Government on issues arising as required.

The Principal Account Officer (PAO) responsible for the Post Office is the Permanent Secretary of the respective department that holds the shareholding of Post Office Ltd (POL). Before its separation in 2012, POL was part of Royal Mail Group. This would be the Permanent Secretaries from the following departments:

Department for Trade & Industry (2000 – 2007)

Department for Business, Enterprise & Regulatory Reform (2007 – 2009)

Department for Business, Innovation & Skills (2009 – 2016)

Department for Business, Energy & Industrial Strategy (2016 – Present)

We continue to support the United Nations World Food Programme (WFP).

On 20 March, the Foreign Secretary announced that the UK has funded WFP to provide 2,000 tons of food aid, enough to feed 275,000 people in Gaza. This is our largest delivery of aid to Gaza during the current crisis.

We remain committed to getting humanitarian aid to the people in Gaza who desperately need it, including through UN agencies and British charities.

The UK is resolute in its commitment to Israel's security. Our position on Hamas is clear: we condemn Hamas' attacks against civilians which are unacceptable and unjustifiable. We unequivocally condemn the use and possession of indiscriminate weapons by militant groups in Gaza. Hamas and other terrorist groups must cease their campaign of violence, for which there is no justification. Such activity compromises the region's security, its ability to prosper and escalates already high tensions, with consequences for the international community. Hamas must renounce violence, recognise Israel and accept previously signed agreements. In the 2030 Roadmap for UK-Israel bilateral relations, signed by the Foreign Secretary and his Israeli counterpart earlier this year, the governments of the UK and Israel have stated that we will continue to work together to keep our people safe from cyber, criminal and terrorist threats.

It is not possible to re-consider aspects of Boards of Inquiry held in the past without full reinvestigation of the original incident. It would not be in the public interest to re-open any such inquiries, where it is deemed there are no lessons to be identified for the Service, such as when aircraft are no longer in service. The likely complexity of such work due to the passage of time and the need to re-allocate Departmental resources are also significant considerations.

In 1997 Defence Ministers directed that BOI should not be permitted to attribute blame or negligence in cases of unnatural death or serious injury. Subsequently, in 2008, Boards of Inquiry were replaced by Service Inquiries under the Armed Forces Act 2006, separating accident investigation from the operational chain of command.

Service Inquiries (SI) are not permitted to find negligence or apportion blame, in order to encourage an open reporting culture, and to ensure that full and frank evidence be provided to SI panels.

As the noble Lord will be aware, Lord Philip’s independent review of 2011 into the Mull of Kintyre accident of 1994 was instrumental in the replacement of Boards of Inquiry with Service Inquiries. A Service Inquiry is an inquiry held under statute and seeks to identify where there are lessons to help prevent recurrence. As such, Service Inquiries are not permitted to apportion blame or find negligence.