§ Mr. RedwoodTo ask the Secretary of State for Trade and Industry (1) what limits the Government have set on Post Office expenditure on acquisitions this year and next; and what is his current forecast of the Post Office contribution to the public sector's revenues; [66228]
(2) what assessment he has made of the impact of the acquisition of German Parcels on (a) the Post Office's net cash generation and (b) the level of overall public borrowing. [66153]
§ Mr. ByersUnder the new financial framework for the Post Office, announced in the House on 7 December 1998,Official Report, columns 21–24, by my right hon. Friend the Member for Hartlepool (Mr. Mandelson), the proportion of profits removed from the business will be halved, enabling it to finance greater levels of investment. 499W In addition, the Government recognise that larger growth investments may require prudent borrowing. Post Office proposals for the largest strategic investments, including acquisitions, will be considered on a case-by-case basis.
The Post Office contribution to the public sector (apart from normal corporate taxes) was expected to be £310 million for 1998–99, and £207 million for 1999–2000, the latter based on an estimate of 50 per cent. of post-tax profits. Adjustments to these external financing limits to take account of UK borrowing to finance the purchase of German Parcels will be made shortly.
§ Mr. RedwoodTo ask the Secretary of State for Trade and Industry what is the cost to the Post Office of the acquisition of German Parcels. [66154]
§ Mr. ByersThe Post Office has asked that the precise details of this specific transaction not be released for reasons of commercial confidentiality. The financial implications of Post Office investments will properly be reflected in both published Government and Post Office accounts.