Mandelson accused of Royal Mail pension accounting trick

Business Secretary Peter Mandelson has been accused of planning “a massive
and wicked accounting trick” by taking over the £22 billion Post Office pension
fund and leaving future taxpayers to pay a feared £6.8 billion pensions deficit.

The charge was made by Tory shadow business secretary Alan Duncan amid
speculation over proposals in a forthcoming independent review of Royal Mail’s
future by Richard Hooper, former deputy chairman at media regulator Ofcom.

Duncan said the pension fund takeover would reduce the paper value of the
national debt but leave the state with a future liability.

Hooper is widely expected to recommend that part of the Royal Mail should be
privatised because, in the long term, it will not be able to survive increased
private sector competition and changes in its business environment without
sweeping changes to improve efficiency.

Hooper is also expected to warn that the massive investment needed in the
Royal Mail is likely to be hindered by the scale of the public body’s deficit.

Mandelson has said that the government remains committed to keeping Royal
Mail in public ownership.