HC Deb 17 December 1998 vol 322 cc705-6W
Mr. Redwood

To ask the Secretary of State for Trade and Industry (1) what estimate he has made of the impact of the proposed Post Office changes on public spending totals in (a) 1999–2000, (b) 2000–01 and (c) 2001–02; [64404]

(2) what estimate he has made of the loss to the Treasury from the revised Post Office external finance limit in (a) 1999–2000, (b) 2000–01 and (c) 2001–02. [64411]

Mr. Mandelson

As a self-financing public corporation the Post Office is outside my Departmental Expenditure Limit. Capital expenditure by the PO contributes to Annually Managed Expenditure. The impact on the Public Sector Net Cash Requirement is broadly equivalent to the Post Office's External Finance Requirement, which will depend on a number of factors including the level of profits in future years and any borrowing. As I announced on 7 December 1998,Official Report, columns 21–39, an External Financing Requirement (EFR) of minus £207 million has been set for 1999–2000 and in following years the EFR will be equivalent to 40 per cent. of post tax profits. As indicated in the reply given by the then Secretary of State to my hon. Friend the Member for the City of York (Mr. Bayley) on 17 July 1998, Official Report, column 356 the EFRs of minus £335 million announced then were an interim measure pending the outcome of the review.

Mr. Redwood

To ask the Secretary of State for Trade and Industry what restrictions will be placed on the Post Office's permitted scope for the acquisition of overseas companies under his proposals for its future. [64403]

Mr. Mandelson

Under the Post Office Act 1969 the Post Office can make acquisitions, including overseas acquisitions, that are "requisite, advantageous or convenient" for the purpose of its business. The increase in retained net profits I announced on 7 December 1998,Official Report, columns 21–24, will enable the Post Office to finance an increased level of investment. However the Government recognise that larger growth, including acquisitions and joint ventures, may require prudent borrowing. The Government will approve normal Post Office requests for borrowing for investment cases that are commercially robust. Separate fast track arrangements will be put in place for considering the largest investments. Further details will be provided in the White Paper to be published in the New Year.