Written answers and statements, 11 November 2010

[TrueBlueTerrier]

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Bill Esterson (Sefton Central, Labour)
To ask the Secretary of State for Business, Innovation and Skills what assessment his Department has made of the likely implications for the public purse of (a) his proposed part-sale of Royal Mail and (b) the proposed treatment of Royal Mail pension fund liabilities in the (i) short-term and (ii) long-term.

Hansard source (Citation: HC Deb, 11 November 2010, c485W)

Edward Davey (Parliamentary Under Secretary of State (Employment Relations, Consumer and Postal Affairs), Business, Innovation and Skills; Kingston and Surbiton, Liberal Democrat)
The reforms we are proposing are there to secure the universal postal service, which Richard Hooper identified in his report as being under threat. It is too early to speculate on the likely proceeds that we will receive from the sale of Royal Mail. It will depend on the market value of the company at the time of sale, and the stake that we decide to sell in the first instance.

We intend to transfer the historic liabilities of the Royal Mail Pension Plan (RMPP) into a new pay-as-you-go public service scheme. As at March 2010 the RMPP had a deficit on an ongoing funding basis of £8.4 billion. In practice pensions will be paid as they fall due. On transfer, we expect payments of around £1 billion per annum will be required. We estimate payments will fall below £1 billion per annum after around 25 years.

[N1-22postman]

I find it very worrying that the Royal Mail Pension Plan(RMPP) will become a pay-as-you-go scheme with privatisation.No wonder the ConDems are so keen to sell us off.They will get only £1or £2 billion from the sale but by making the RMPP pay-as-you-go they will pocket more than £26 billion of our assets immediately.What a steal!

[fishtank]

Indeed it will be a steal...you don't think they are going to the trouble of selling Royal Mail for the relatively small potatoes that the actual sale will bring in?
It was...is...and always will be about the pension assets.
You could almost say it really is "the deal of the century".

[heapsy]

I feel a Maxwell style robbery is on the cards any time soon. My question would be, what if they go back on such a deal, after having taken the funds, and leave us all in the s**t?