Government to take on £10.3bn RMPP deficit by March

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The Royal Mail’s £10.3bn pensions deficit will be taken on by the tax-payer next spring as legislation to privatise the service is expected to become law next week.

The measures are in the Postal Services Bill which is waiting for royal assent after the House of Commons yesterday accepted amendments proposed in the Lords - including three relating to the pension fund (PP Online, 25 May).

Debating the amendments, parliamentary under-secretary of state for business, innovation and skills Ed Davey confirmed the government's intention to take responsibility for the scheme by March 2012.

"Members will appreciate what a relief it will be to the 435,000 members of the Royal Mail pension plan to know that their accrued pension rights will be protected sooner rather than later," he said.

The government had previously stressed that member protection was "paramount" (PP Online, 7 April) but Labour MP Michael Connarty condemned the move, blaming contribution holidays taken by the Royal Mail under successive governments for the crippling deficit.

The amendments approved include measures to enable scheme assets to be transferred in two stages, create a legal framework for information sharing and give ministers greater control of the timing of any secondary legislation.