§ Mr. MitchellTo ask the Secretary of State for Trade and Industry what contribution was made to the Consolidated Fund by the Post Office in each of the last 10 years at(a) actual and (b) 1999 retail index prices; and if he will initiate a study of how future payments could be used to fund future investment in the postal services. [94637]
§ Mr. Alan JohnsonThe Post Office does not make payments to the Consolidated Fund, as it does not pay a dividend. However, its contribution to the Exchequer can be measured by its negative External Financing Requirement, through which it is obliged to invest in 457W gilt-edged stock or National Loan Fund deposits. In each of the last 10 years its contributions in both actual and in 1998–99 RPI values were as follows:
£ million Actual 1998–99 RPI 1989–90 102 142 1990–91 0 0 1991–92 74 90 1992–93 80 94 1993–94 182 211 1994–95 235 265 1995–96 245 267 1996–97 285 304 1997–98 338 349 1998–99 321 321 In the White Paper "Post Office Reform: A World Class Service for the 21st Century", the Government confirmed that under the new financial regime for the Post Office an equivalent of a commercial dividend would be set at 50 per cent. of expected post-tax profits in the current financial year and at 40 per cent. in subsequent years. This will more than halve the rate at which profits are removed from the business and increase the funds available to the Post Office to fund future investment. Once the Post Office has been established as a plc, it will pay an annual dividend to the Exchequer rather than build up its deposits.