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.

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.

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.

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.

My Lords, the Government are keen to see this review launched as soon as possible. We are making progress with the appointment of a chair. Once this process is complete, the review will then be formally launched. My colleague, the Minister for Small Business, Consumers and Labour Markets, has also spoken to Paul Patterson—managing director and head of sales and country leadership for Fujitsu UK—who has confirmed that Fujitsu will collaborate fully with the review.

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)

The responsibilities of Principal Accounting Officers (PAOs) are set out in Managing Public Money. For Post Office Ltd. (POL) the PAO is the BEIS Permanent Secretary.

Specifically, the PAO is accountable to Parliament in respect of POL and for ensuring that arrangements are in place for shareholder oversight of POL. The PAO is also responsible for advising the responsible Minister, including in areas such as:

(i) an appropriate framework of objectives and targets for POL in the light of BEIS’s

wider strategic aims and priorities;

(ii) an appropriate allocation of BEIS’ budget for POL in the light of BEIS’s overall

expenditure priorities; and

(iii) how well POL is achieving its strategic objectives and if it is delivering Value for

The Government has not overseen any specific project at the Post Office. It is important that the company is allowed to run as an independent, commercial business, albeit in compliance with the principles set out in Managing Public Money.

My Rt. Hon. Friend the Secretary of State for Business, Energy and Industrial Strategy has appointed a Non-Executive Director (NED) on the POL Board since its separation from Royal Mail in 2012. From 2014 onwards this role has been performed by UKGI (previously the Shareholder Executive).

Before 2012, there was no representation at Board level (within Royal Mail Group). The Shareholder Executive provided a monitoring function and reported to the relevant department (BEIS, BIS, BERR and DTI).

The BEIS Permanent Secretary has some key controls of the Post Office – namely approval of the annual business plan, some financing aspects of the company and approval of any specific commitments above £50m.

The Principal Accounting Officer (PAO) responsible for Post Office Ltd. (POL) is the BEIS Permanent Secretary.

Issues regarding POL’s IT system and its relationship with postmasters are operational matters in which the PAO and Ministers relied on information provided by POL senior management.

Following the Common Issues Judgment in March 2019, POL advised Ministers that it intended to change its approach to the litigation. This included changes to the POL legal team and strategy, and ultimately led to the successful mediation in December 2019.

The Independent Review into Post Office and the issues highlighted by the litigation was approved within Government at all levels, including by the BEIS Permanent Secretary.

My Lords, while the Government are pleased that a resolution has been reached on this difficult matter, the Post Office led the mediation and the Government were not party to it. While the financial settlement is a major step toward resolving some of these grievances, there is much more for the Post Office to do, including resetting its relationship with postmasters and addressing historic shortfalls for postmasters who were not part of this group litigation.