Should the taxpayer plug the Royal Mail's �7bn pensions deficit?

[Gromit]

The Hooper Commission Report into the Royal Mail has paved the way for it to be part privatised.

It is intended to look for a commercial partner for Royal Mail. Unfortunately, it is very badly run and has a massive hole in its pension fund to the tune of �7bn.

To make Royal Mail more attractive to potential partners, the Government intends to plug the �7bn deficit with taxpayers money.

A disgraceful use of public funds?

[LoftyLottie]

Yes. I await other replies with interest to see if my mind gets changed.

[LoftyLottie]

I meant 'yes' its a disgraceful use of public funds, rather than 'yes' to the question title!!

[sqad617]

The question is Gromit, is it worth �7bn to get rid of the bl00dy monstrosity. It loses about �1million a day keeping the rural post offices open and for the past ten years, most independant analysts have agreed that it is inefficiently run and overstaffed, but nobody dare take on the Unions on this issue.

�7billion....worth every penny.

[anotheoldgit]

I covered this in my post 'Nationalise the Ultilities'

I also provided a link.

[Gromit]

sqad617

The Royal Mail has been making a profit for years...

2008 - �117 million
2007 - �86 million
2006 - �355 million
2005 - �537 million
2004 - �400 million
2003 - �100 million

Why do we have to top up their pensions hole when they are making such profits yearly?

[LoftyLottie]

Surely if public money is used it should be for nationalising the post office not for preparing it for a sale to a prospective private company outside of the UK?

[LoftyLottie]

If Gromit's figures are correct (I have no reason to believe otherwise) the surely it doesn't need money pushing into it to make it attractive to potential partners?

I am quite happy for it to be privatised if it means a successful organisation will materialise. However, I am not happy for 'my' money to be put into the hands of a private company and to bale out a pension fund, with no return to me.

[Gromit]

LoftyLottie

2008 is a typo, it should read �177 million profit.

[sqad617]

Just a point and I feel that my figures are correct:
2007 April -September.....profit �159 million
2008 April -September'''profit �22million

Pay for the Chief Executive of a "Public" company:
Salary �629.000 per year
Pension etc �158.000 per year
Total ----well you work it out.

2007 Pay rise of 26% taking his package to �125 million a year.

I could be a Socialist for that.

[Gromit]

sqad617

2008 (April-September)
http://news.bbc.co.uk/1/hi/business/7686826.st m

[LoftyLottie]

So I am about to save the Chief Executive's poorly pension then!.......................................

[Gromit]

Adam Crozier, chief executive of Royal Mail, gets �1,242,000 not �125 million.

With bonuses, cash in lieu of pension, that is bumped up to just over �3 million.

http://news.sky.com/skynews/Home/Business/Roya l-Mail-Chief-Executive-Adam-Crozier-Paid-3m-De spite-Post-Office-Closures/Article/20080541317 017?lpos=Business_Article_Related_Content_Regi on_4&lid=ARTICLE_1317017_Royal_Mail_Chief_Exec utive_Adam_Crozier_Paid_%A33m_Despite_Post_Off ice_Closures

[sqad617]

Sorry, typing error �1.25 million.

[Davethedog]

It should be remembered that the main benificiaries of the pension are ordinary working folk, postmen/ladies, sorters, drivers etc and not fat cats.

If this government can bail out the banks they can ensure that public servants who have no control over how thier pension money is invested get a fair crack.

And no I have nothing to do with the Post Office.

[LoftyLottie]

I was only joking about the Fat Cat's pension - I realise that it would be helping the ordinary workers too. However, I still think is a disgraceful use of public funds. A lot of private pension plans have gone down the pan too. Who is going to bale those people out.

[sqad617]

Good point Ethel...nobody is going to bale these people out, because the majority of these people are middle class private sector workers with no Union connections.........no good to the New Labour Party.

[LoftyLottie]

Searching high and low for Ethel's reply.................................................. , Squaddy ????

[BertiWooster]

Successive governments over the years were quite content to take the profits made by Royal Mail , without making any return investment in the business , in terms of modernisation etc .

At the same time recently, the regulator has deemed it appropriate to open up the UK postal business to competetion from from foreign companies , without any recipricol arrangements made in these other countries .

Thus , these companies have been able to come in and
' cherry pick ' the profitable areas .

And Royal Mail is still expected to provide a universal postal service at the same price to everyone , whether you are in a city or in the outer hebrides .

You may soon have reason to really complain

[rov1200]

If TNT are to buy only the juicy bits of the post office they should also plug the �7 billion pension shortfall. If the government pays it off which other pension fund will come running with the begging bowl.

[LoftyLottie]

How true rov1200.