£1.5 billion flushed down the toilet

Deemy

The govement has just given as a freebie £1.5 billion of tax payers money ! To the privatised Post Office !!!

So is this the tip of the iceberg ? What about other deficits amongst privatised companies ?

Say hello to a much larger public sector pensions deficit if you take into account privitaised industry ! How much ? £800 billion ? £1 trillion ?

Yes this will impact on the private pensions, as there is no such thing as a freelunch !

dunstonh

I heard recently that the BT pension scheme is underwritten by the Govt and has a massive deficit. No doubt more taxpayers money will be heading to them at some point.

ManAtHome

Thought it was more like the new guarantee scheme but better in that it pays 100% if the Post Office fund goes bust (isn't it 80% for us plebs?). Presumably there was a share out when BT was hived off and an agreement to continue with the guarantee.

The EU are investigating the PO/BT guarantees anyway (the "is this really state aid" department).

ManAtHome

Deemy, looks like you've got the wrong end of the stick, apparently it's just a LOAN (phew) - couldn't possibly be anything corrupt and scandalous about that..
http://news.bbc.co.uk/2/hi/business/4996052.stm

Deemy

The truth is hidden away....

They are getting a £1.5 billion freebie... just that its not visible for legal reasons i.e. EU rules

I mean from the reserves ... :rotfl: .. dig deeper, forget the press.. the reserves are goverment controlled money! What about the cost of restructuring that the tax payer will pay for ???

And I hear say repay the LOAN ?... what like Rover repaid their loan:rotfl: ... Yeh they may repay the loan... by dipping into THE reserves

cheerfulcat

The govement has just given as a freebie £1.5 billion of tax payers money ! To the privatised Post Office !!!

What makes you think that the Post Office has been privatised?

ReportInvestor

Think what you will save in postage, Deemy!

BT is going to court to establish that the taxpayer has granted a £28bn guarantee to its pension fund!

And it's not just BT.

Crown Guarantees to privatised industry pension funds - IA link

P.S. cc is right. Labour promised not to privatise the Post Office in its last manifesto, but no-one believes them.

derrick

I wish we would stop using the term "billion" when it is not.
An English billion is 1,000,000,000,000
An American "billion" is 1,000,000,000

As the amount in this thread is talking about 1.5 billion, it is not, it is one thousand million. i.e an American "billion.

Just like the American gallon is less than ours, you are inflating the value.

ReportInvestor

In a globalised financial world we have stopped using our billion so as to avoid confusion and panic.

VardreRFC

Deemy wrote:

The govement has just given as a freebie £1.5 billion of tax payers money ! To the privatised Post Office !!!

Just a note from a proud Royal Mail employee :

1) We have not been privatized.

2) Part of the reason for this deficit, was that for 7 years due to 'favorable market conditions' Royal Mail, and not the employees, took a payment holiday from paying their share of contributions. At this time the Government levy (the money Royal Mail pays the Government, subsidizing you, if you are a taxpayer) trebled.

3) The money comes from reserves (Money the company has already paid in) and a loan at commercial rates, that’s not my idea of a freebie.

4) The vast majority of the money is not to cover the pension deficit but to invest in new machinery. We have already implemented major changes to our business resulting in our best quality of service record ever in Royal Mail Letters. Parcel Force Worldwide hitting all of its financial, quality and people measures, making it the most successful year ever. Achieving, the stretching year end sales targets, in Post Office counters. In the face of competition.

5) The new machinery will involve more major changes in the way we work, and large job losses. I can accept that. What I find harder to accept is to way people bash the Royal Mail, with little of no knowledge of the facts.

Rant over

Thank you for reading this post.

Milarky

What practical use would a British billion (10^12) have had in the past? The first time I can remember this term "billion pounds" (as compared to "six-hundred and fifty million pounds", say) being bandied around in discussion was probably during the 1983 general election when it was how the prospective parties increasingly discussed their spending plans.

But Wikipedia has some interesting remarks on this:

http://en.wikipedia.org/wiki/Billion