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Royal Mail and HMG's creative accounting

Robert Peston | 16:50 UK time, Monday, 11 May 2009

Here's today's riddle: which financial black hole could be transformed into a mountain of gold simply by moving the ownership of the black hole from one part of the public sector to another?

The answer is Royal Mail's pension fund.

Here's the Alice-in-Wonderland financial engineering.

Royal Mail worker collecting post

Royal Mail is a plc with a single shareholder, viz HMG. And our somewhat battered postal service has a massive pension fund that's burdened with a huge and troubling shortfall between assets and liabilities.

Because Royal Mail can't afford to fill the deficit in the fund, the government has proposed to take responsibility for all its liabilities as of 16 December last year (as part of wider plans to rehabilitate Royal Mail that include a highly contentious sale of a stake to the private sector).

Under this pension rescue plan, the government would also inherit Royal Mail's assets.

These are the numbers.

Royal Mail's assets - at 16 December - have a value today of just over £20bn. But its liabilities are worth around £30bn.

So for poor, beleaguered Royal Mail, there's a gap between the assets and liabilities - a de facto and crippling debt - of around £9bn.

Horrid. And you can understand why Royal Mail's executives are desperate to be shot of this financial millstone.

But a millstone for Royal Mail looks altogether more glistening and shiny to ministers - because of what happens to these assets and liabilities when they are transferred to the government?

The assets can be sold, to reduce the official national debt by around £20bn. Which wouldn't at a stroke sort out the UK's overstretched public finances, but would be jolly useful.

And the government has indeed said it would sell these assets over a few years to "protect value for money for the tax payer".

So by taking control of Royal Mail's pension fund, it eliminates one black hole (Royal Mail's) and shrinks another (the national debt).

But hang on a sec, you are surely saying. What about those £30bn of liabilities to Royal Mail's current and future pensioners? Isn't that a burden of a hideous and lethal kind?

Do we as taxpayers really want to become directly responsible for all that (as opposed to our indirect responsibility, as of this moment)?

Well, the logic of ministers appears to be that we won't notice we've taken on this burden, because the government's commitment to pay pensions to public-sector workers in unfunded pay-as-you-go schemes - which is what the Royal Mail one will become - is not part of the national debt.

That said, the government's Actuary's Department estimated that the total liability of unfunded public service occupational pension schemes as at 31 March 2006 was £650bn - or about 50% of GDP in that year.

The liability will be rather bigger now.

So there are two ways of looking at the conversion of the Royal Mail fund into an unfunded pay-as-you go scheme: as a rounding error, almost irrelevant, in the context of the extant public-sector pension liabilities; or as evidence that ministers don't have the beginning of an idea how to curb the growth of an incredibly expensive set of pension promises.

Little wonder that John Ralfe, the pensions analyst, describes what's happening to the Royal Mail pension scheme as a colossal fiddle.

Some of you may think he could use stronger language.


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  • Comment number 1.

    This governments last epitaph wil be 'We were always good at shoving everything into the long grass.'

    'By the time they all know what's hit them we'll be long gone.'

    It also sounds very similar to Ted Heath's statements about Europe.

  • Comment number 2.

    Bob wrote:

    'Royal Mail's assets - at 16 December - have a value today of just over £20bn. But its liabilities are worth around £30bn.

    So for poor, beleaguered Royal Mail, there's a gap between the assets and liabilities - a de facto and crippling debt - of around £9bn.'

    Maths certainly isn't your strong point then Bob!

  • Comment number 3.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 4.

    If Politicians of all Parties and the Government in particular, can fiddle their own expenses without blinking an eye lid, then it is so, so easy to fiddle the column, where Billions of unfunded Public Sector Pensions are hidden away.

    Parliament needs to disolve whist a full independent Audit of the Nations Books takes place. It seems that UK PLC is bankrupt in all but name. Moral compasses are spinning like tops at present in Westminster.

  • Comment number 5.

    It proves the "financial fix" we are in is nothing but an accounting fix!

    With accounting rules bent to suit the case(s) our investment into the banks or the Royal Mail will be worth a fortune and once they find the right setup in between quantifying and weighing toxic papers, former holy pension pots and creative forfeiting of future hopes we will be able to cover the complete country's debt and include some more Tridents and other old boys' toys in one go.

    It is just a matter of presentation; no difference to our traditions that took us here and, sorry, no hope for any sustainability in reference to future: ours and our children's!

  • Comment number 6.

    Robert, I would like to use stronger language myself, but I am not allowed to. So we will have to be content with this lovely little poem -

  • Comment number 7.

    Out of interest, do BBC journalists qualify for unfunded final salary pensions too? Fair play to you for finally bringing the subject up, but it does seem odd that such a massive liability is so little talked about.

  • Comment number 8.


    There is nothing here to surprise anyone is there?

    It is a collosal piece of creative accounting with the taxpayer picking up the bill and the pensioners left very short-changed. This is the sort of rip-off that needs to stop in this country or else we will all end up as beggars.

    The way to square the Royal Mail muddle is to stop kicking it in the teeth, invest in it and work it hard. In the end the only thing that pays is hard work which is why the taxpayer keeps getting dumped on as he or she is the only person creating wealth in this country.

    I am surprised that no minister has yet suggested putting the Royal Mail pension fund on expenses.


  • Comment number 9.

    well thats ok then, so the unions will say to the posties take this deal, they will sell everything off, but your pension will be ok , posties vote for the government, its a done deal especially as this is what the Tory plan of action would be too, thereby adding more debt to the public purse , magic

    And these assets what are they? LDV vans ? that the posties run, the mail centres? the land ? , so I can now say goodbye to my mail service as I live in a rural area an no firm will entertain that, just like they dont entertain rural areas for broadband services,cable, gas, street cleaning, gritting of paths in the winter, next day delivery from any parcel firm in the country , unless its Royal mail, well they might as well do it, Im sure some of the ministers will get a job on the board of the new postal service company

  • Comment number 10.

    Of course it may also be the only way to both keep the Royal Mail running, and also to get private sector management in to help run it more efficiently.

    Of course the government is going to present things in the way that is most politically advantageous. No surprise there! But the more important question is: is this a good policy for the public finances and the economy? Here's my answer:

  • Comment number 11.

    Q. What is the (theoretically) safest place to stuff these pension funds
    A. Government Bonds, which are future promises to pay by HMG.

    So why not cut out the middleman? This principle is explained in Wizards of Money Part 12. Look it up.

  • Comment number 12.

    Surprisingly, it be just be that this approach is actually the sensible thing to do.

    If you think in terms of goods and services rather than abstract money, then the reality is always that those currently in work give up some of their consumption in order to make those goods and services available to those who are currently pensioners.

    The mechanism by which this happens could be via taxation (as in unfunded pay-as-you-go schemes) or it could be through savings-based pension schemes (building up a stock of money which allows pensioners to claim a percentage of overall consumtion). But the effect on the purchasing capabilities of both workers and pensioners is ultimately the same in both cases.

    Which is better? Well it could be claimed that "encouraging savings" is a good things. However too much money in pension funds has probably contributed to the asset booms of recent years - too many "savings" chasing too few places to "invest". In reality there are two completely unconnnected figures : the percentage of GDP needing to be "saved" in order for pensioners to get a good pension when they retire; and the the percentage of GDP need to be invested in industry to maintain the competativeness of the economy. It seems the latter is significantly less than the former (and in any case a very large amount of infrastructure investment is actually carried out by the Government and funded by taxation).

    So could it be that moving the balance much more to a pay-as-you-go system for pensions would be in the national interest. Just nationalise a whole bunch of pension funds and convert them to pay-as-you-go, using the assets to pay off the debt the Government has built up over the past year.

    And how do you pay for the additional pay-as-you-go pensions without a hike in taxation? Well we could just get rid of all the tax breaks currently allowed on pensions schemes, which as we know benefit the rich much more than the poor.

  • Comment number 13.

    The purpose of accountancy (for a company) is to determine how much tax it has to pay, not how much money it has. Strange and illogical, but sadly true.

    For HMG, it's not even that. Where did they get their accountants, ENRON?

    Worse still, all this manipulation and re-organisation will
    1. cost us money
    2. totally ruin the Royal Mail

  • Comment number 14.

    With a "culture" of expenses claiming as it is in Westminster is it lesurprising that a "fiddle" seems like a good idea to a Minister?

    More seriously, the Government appears to have been learning its tricks from its run ins with bankers. It is, indeed, a fiddle - like so much of the fractional reserve banking system, and the "profits" banks are able to claim they are making on the back of their own declining credit ratings.

    Never in my near 50tear life have I watched so slack jawed as the future is so willingly torched for the sake of short term expediency. Its sticks in my throat, and the fact that certain ministers take the "whatever it takes" attitude to these proposals leaves me without hope for anything I believed in called a democracy, parliament, public service, collective responsibility, or indeed any responsibility for anything other than short term fixes.

    This has got to stop. Only so much can be swept under the carpet of the rather near future.

  • Comment number 15.

    And to think that those of us in the private sector could actually resent this, being denied access to these sorts of pensions ourselves whilst paying for theirs...

    It's an insult to the rest of us that these schemes are still taking in members.

  • Comment number 16.


    I agree 100% we need to petition the Queen to dissolve Parliment whilst an Audit takes place and any M.P's who have been hiding/Lied about (in or out of the house) the true extent of the problems facing UK PLC need to be charged and/or Banned from standing for re-election.

  • Comment number 17.

    Sorry I am too busy rolling about laughing to post coherently, put it down to hysteria, what ever will they come up with next?

    MPs should be made to attend the next PMQ wearing frizzy red wigs, big red noses with a signs saying 'corrupt' around their necks.

    Its laughable.

    When will the queen step in and dissolve this shoddy lot. Lets get a cromwellian battle re-enactment society to march on parliament and proclaim them again ' unfit to inhabit this sacred place' which they surely are.

    Just think of the list of shame that could be read out as justification:


    cash for honours

    cash for questions

    cash for law changes

    The legality of the iraq war

    The UK being complicit in CIA torture

    The election that never was

    The 45 minute claim

    The Dr david Kelly affair

    Cigarette advertising and a £1m donation to the labour party.

    The arrest of an opposition MP in the house of commons for doing what GB was famous for when he was in office...shouldent he be arretsed by the terorist squad too?

    The vote on detension without trial.

    The disgraceful Ghurka affair..they can find billions to bail out greedy bankers but when it come to funding people who are prepared to die for this country we will not even give them a home...too expensive Gordon says...

    What more evidence would the Queen need exactly to dissolve parliament or should we also stop charles from getting onto the throne 1 more time as well to complete the picture of history repeating 1643 it was atradgedy many lost thier lives..this is most definately a farce.

    What are we waiting for?

    I have stopped laughing now by the way...


  • Comment number 18.

    I suppose the pay as you go state pension is also not on the balance sheet either - along with the debts of the various Public Private Partnerships along with perhaps what our European partners expect us to contribute to help their unfunded public pension schemes as well. There are two ways to look at this : a) We are in an almighty mess as the credit crunch is an iceberg with a lot more to come b) We are not in a mess at all All that is wrong is our financial system : If a business paid a worker 1p to make a widget and wanted to sell the widget in the shops for a profit - so sale price say 2p - then the workers - the consumers will not have enough money to buy all the goods in the shops - our financial system crashes using just 1p and 1 widget ! If we understand that our financial system is just a game of musical chairs - always more people that chairs always more prices than money - then we can say stop !, then we can change it from what it is a silly childs game and change it to what it should be a virtual representation of reality. NEFS Net Export Financial Simulation is a started for ten in this direction at In the game of musical chairs no matter how hard the kids run one will always lose ,without NEFS, or something like it, no matter how hard we work we will always be broke unless we change the game.

  • Comment number 19.

    The massive disparity between the public and private sector pension schemes is one of the great scandals of our time.

    Unfortunately politicians - of all shades - are leary of the voting power represented by the 50% or so of our workforce that are in the public sector and so nothing will get done until, a few decades from now probably, the chickens come home to roost!

  • Comment number 20.

    In what way are public sector pension liabilities different from other future government expenditure, for example on running the NHS? It does not make sense to capitalise these expenses, so why do it for pensions? One argument is that pensions constitute contractual guarantees but tell that to those whose occupational pensions got torpedoed by Mr Brown!

  • Comment number 21.

    This is a brilliant idea, and shows just how smart the government really are. All this stuff about fiddling expenses - who cares how much they claim for when they are capable of making billions for the entire nation.

    Yeah the government needs cash in the short term, because it is being forced to fund PFI deals directly. VT need money for a GBP 700 million waste project in Wakefield - and there are probably more in the pipeline. Who could have seen this coming? - banks are bailed out with billions and then won´t lend any of the money into the PFI sector.

    The deal with the Royal Mail should help the banks to understand that the government are real operators.

    There is no problem with the pensioners - GBP 650 billion is a lot of money - but it won´t all be needed on day one, so it allows plenty of time to print it on an as required basis.

    In fact I wouldn´t be surprised if the government does not fully embrace the private sector and just allow the pensioners to print it themselves. Obviously those to frail to operate a printing press would still need some form of assistance - maybe meals on wheels could be beefed up, and rebranded to say, Money on Wheels.

  • Comment number 22.

    What this really shows is the unreality of allowing public sector pension shortfalls to be an "off balance sheet" liability. If the UK had to include an actuarial estimate of the shortfall each year (as private companies have to do) we would have a better picture of the National debt and the urgency of addressing public sector pension reform. These figures are included in some other countries figures (a point GB likes to gloss over when claiming our pre catastrophy debt levels were low) and should be included in ours.

  • Comment number 23.

    Other national assets have been privatized do they work any better.
    There have price increases ,total confusion in the market place looking at the power companies.If by privatizing this is what it entails why does the management at Royal Mail not do that. Make this work for tax payer instead of the shareholders.

  • Comment number 24.

    TO HRH Queen Elizabeth II

    Please I beg you as a loyal subject of this once great nation please intervine on the behalf of your loyal citizens and end this era of greed and corruption. We nee to be able to draw a line under this whole episode and move forward with confidence.
    Its time for you to prove your un-doubted worth to the nation, be bold be strong be true to your people help us in our hour of need. If you act we will support you.

    Love and Loyalty


  • Comment number 25.

    And people think the banks did the damage to the country with their off balance sheet activities. Compared to HMG, they were amateurs!!!!

  • Comment number 26.

    The loathsome gluttony in the City has caused enormous damage to many pension funds.
    I fear that this is just the first of a long list of pension shortfalls and failures.
    The financial industry strikes again, and again.
    You'd probably be better off just going to the nearest casino than contributing to UK pension funds.
    I bet the executives of these funds aren't suffering much.

  • Comment number 27.

    What else can HMG shove under the carpet?

  • Comment number 28.

    More black accounting arts. However, there is a bigger question here. Just how big is the unfunded public sector pension liability deficit? 2 years ago it was 168 billion pounds. Now? 300 billion pounds plus, before thinking of selling the Royal Mail.

    HMG has just bet the ranch on bailing out our financial system at a cost of (as all the commentators appear to be saying) somewhere between 300 billion and 1 trillion pounds. Basically, the UK has public debt levels fast approaching 100% of our GDP. Banana republic status.

    Then, of course, our actuaries come to the rescue. No problems lads and lasses, we'll just extend the pensionable ages of all adults to 70. That way, at a stroke, we can reduce the national debt repayment period by 15 years (10 for women and 5 for men) based on today's retirement dates and interest rates, assuming 1% reduction in repayment debt sums for every extra year worked by the working population. Add this to the growing birth rates, and immigration, and hey presto, we'll be back on track at 2006 national debt levels by......2020. Oh, and by the way, don't worry about increasing taxes and shrinking public spending - you can still choose between the two. Not a problem for polarized British political democracy in a two party system (sorry Lib Dems, SNP's etc).

    The bottom line is that very very soon, if not already, public sector benefits CANNOT GO ON AS THEY ARE. The public sector workers will soon get a sharp and nasty wake up call as jobs go, or as workers will be asked to work longer. Either way, it revvs up the looming spectre of the rise of the trades unions again protecting the rights of workers. That's all fine, provided we, the taxpayer, can afford it. Fat chance!

    Let's at least borrow money today to create real jobs in manufacturing, technology, and "real asset sectors". Sadly I don't think that will happen. There is still lots of skill left in UK PLC, despite the best efforts of 3 decades of government trying to get rid of it in the pursuit of financial hubris and greed.

    What goes around I'm afraid, comes around, and we are all paying for the decisions of a few elected parliamentarians.

    And as for parliamentary expenses..............

  • Comment number 29.

    # 17 - Jericoa,

    I fear the Queen may be our only hope right now. If she asks I'll be available!

  • Comment number 30.

    Question: What's the difference between everyone having a pay-as-you-go pension (like the State Pension) and everyone having a private sector "pension-fund" pension? In the first case, those in work pay a percentage of their earnings in tax. In the second case they pay a percentage of their earnings into a pension fund. Either way the worker pays out money. Either way the pensioners receive their income. So for both worker and pensioner there is *no* difference.

    Where there is a difference is that with pension funds a huge amount of money is built up for the City to play with (and generally rip off). There is absolutely no need for this enormous pot of money to exist, though no doubt all the City insiders have consistantly told the politicians that it is vital. There is of course a need for each generation to invest a proportion of GDP in capital investments, but the amount required for this bears no relation to the amount currently kept in pension funds (and little pension fund money is actually used for long term capital/infrastructure investment anyway). The money sloshing around in pension funds is a major contributor to the asset price bubbles which are the cause of many of our current problems.

    We should nationalise the pension funds, using the money to pay off the debt the Governement has built up to fix the mess caused by the City (and I would guess a fairly large proportion of that debt is owed to those (*our*) pension funds, which is frankly ludicrous). We should get rid of all tax breaks on pensions and move to a European style system where the bulk of everyone's pension comes from a far more generous (pay-as-you-go) State pension, and far less from private pension funds.

    This is not a difficult problem to solve.

  • Comment number 31.

    #17 To that you could also add the leo blair kidnap plot.

    but they are now using the same tricks as they critisied the bankers for

    perhaps the bankers have been learning all along from the Chancellor for the last 12 years.

  • Comment number 32.

    What baffles me is why on earth the person(s) who leaked the expenses info (and probably this to RP) are being allowed to get away with this without any action being taken against them. If they don't own up to it then surely the Police should be brought in to track them down at all costs, drag them in front of the Queen (if necessary kicking and screaming in handcuffs) and have them publicly knighted.

    At the very least!

  • Comment number 33.

    We have been misled by the reporting of Gordon Brown's infamous "No more boom and bust"
    Whats missing was the word "we're" from the statement.
    He should have been saying "No more boom and we're bust!
    Then again honesty was never one of his strong points was it!
    Where is HM Queen Elizabeth when there is real work to be done?
    Close this corrupt parliament now!

  • Comment number 34.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 35.

    This "leger de main" by HMG is plain and simply crooked.

    It comes out of the same stable as the Parliamentary Expenses arrangements.

    And to think the government had the gall to criticise the banks for creative accountancy.

  • Comment number 36.

    "Alice in wonderland financial ENGINEERING"

    I think that sums up GORDY'S AND NULABOUR'S antics for TWELVE YEARS of



  • Comment number 37.

    If I was a postie or any other public servant, I might be tempted to ask how could my unfunded pension be a pension if it was unfunded? I suppose the answer is, when I retire I go to the post office, (if we still have one) to collect my first pension payment. I get handed a brown paper bag with fresh air in it and am told to breathe deeply (to calm down my panic attack?)

  • Comment number 38.

    So when are the PO workers(and every other public servant) going to have to accept a paltry pension as the private sector currently receive.

    In manufacturing, we work our socks off and pay huge proprtions of our meagre salaries into pension schemes that seem to fund the pensions and bonuses of the financial industry. Thats as long as you get your pension before your company has been forced into bankruptcy and the pot has been disappeared.

    I think it is part of the New Labour policies for the working man\woman.

  • Comment number 39.

    Hold on a moment. Twenty billion in assets sounds a nice round number, but just like the banks' assets, how good is it? It's a big number and not too much of it can be accounted for by deteriorating vans and furniture. The bulk of it will be somebody's assessment of owned property values. Who made the assessments? When were the assessments made? Is twenty billion a figure that we can expect a private commercial buyer to pay in this present market? Perhaps a buyer night be prepared to pay over the odds, always provided that he is guaranteed future delivery rate rules and competition control to enable him to make a profit from the British public. How much are we prepared to pay for our mail? Are we prepared to see the postal service disappear altogether?

    Numbers for asset values should always be viewed with some reserve, more especially when they are round numbers in billions.

  • Comment number 40.

    The £650million or 50% of annual GDP is irrelevant - it will never be due all at once. What matters is how much it is costing each year in payments and how is this projected to increase over the coming years - this is what has to be funded and "balanced".
    At the end of the day the country like the banks need finance now and this is £20bn in the bank - the better the books look now, the less likely there is to be a sterling depreciation, bond auction failure etc etc.. - it helps maintain us AAA. A 5% increase in total pension underfunding does not look that big.
    Of course the government will at some point have to address this - and surely there is an easy method to tackle it in part.
    Pay public final salary pensions only on the first £25k of public sector earnings - beyond that public sector employees have a self funded pension scheme like most private sector employees as they can legitimately afford it. That way the argument for lower public sector pay being compensated is maintained and those that genuinely should have service recognised (police, fire, nurses, teachers etc..) keep their benefits.

  • Comment number 41.

    Some people inside and outside government seem hell bend on selling yet another national asset to foreign/private ownership and control. Has RM already been promised to someone years ago ???

    If the liabiities can be wished away so easily with a bit of creating accounting, then RM must be kept in public ownership because 100% of the profits can now go into the Treasury without worries about the pension black hole.

    I am sur any private owners will try pay little, if any, taxes on future profits. What will we leave the next generation? UK plc serfdom owned and exploited from Monaco. Switzerland, Bahamas ... ?

  • Comment number 42.

    OK, so this bail-out guff came from a review by three grandees:Mr Hooper CBE, Dame someone and a Mr Smith. Other than gripes from management, what detailed professional evidence did they take on the pensions deficit of Royal mail group? I cant find any as yet. Does anyone know where I can find it?

  • Comment number 43.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 44.


    The best way to resolve all of the public sector overspends is to create a new HMG backed Ponzi scheme to raise capital.

  • Comment number 45.

    Sounds like massive asset stripping, and debt storage

    It would appear this government has learnt little from the bubble it created

    Why should our grandchildren be saddled with the debt of this government?

  • Comment number 46.

    Hmmmm - big hole in future finances / % GDP due to public pension black hole? Logan's run repeats anyone? Should resolve all!

  • Comment number 47.

    After I left Royal Mail in 1997 the second Pension Fund POSS was wound up, to this date no pension holder has recieved a refund of contributions. The fund was transferred into another POPS scheme, the profits made from the fund dissapeared into HM Governments coffers but the liabilities remained. This also applies to the likes of British Steel with Corus and to a lesser extent with BT pension scheme which was better managed, the original documentation for these schemes was that you could leave the scheme at any time and recieve the refunded contributions.

    The Royal Mail schemes were not payed into by Royal Mail from 1993 when the company took a 'Pension Holiday' so the funds recieved less than 50% of the invesment income from 1993 to which the funds were entitled from the employer until 1999 - 2000 when the Dot com bust created the first pension holes.

    The usual contributions were 7% of net pay by RM and 5% net by the employee for 25 years of service with a final salary pension scheme averaged over 60 years of contributable pay (a 1/60 final salary scheme).

    The new POPS scheme was a contributions only scheme so not a 1/60 final salary based one.

    Royal Mail after years of lobbying HM Government in 2000 bought over a dozen parcel companies in Europe at the height of the share price bubble with borrowed money only to see this asset crash to practicaly nothing within the year, bankrupting the company.

    Various acts by Conservative and Labour Goverments were brought in from 1993 onwards and Trustees now act more like fund managers, so since then they have acted on the schemes behast rather than the employee/pensioner, they never say no to the Employer or the Government - that is why we have had the 40 billion pound pension black hole in POPS, we only got to hear of the Deficits through Parliamentary oversight.

    Who is to blame ?, well the Government, both Labour and Conservative for the introduction of Pension laws which favour the schemes over the rights of the employee. The Government again which is the shareholder of Royal Mail, The Government which is regulator/lawmaker, The Government who appoints Directors and approves their or makes the decisions for them ?.

    One of the key things Einstein said was never give a problem to the person who created it to solve. But there is a second group with oversight.

    One of the key things in being a Representative or Trustee is to know WHEN to act in the interests of the MEMBERS and not of the PARTY, UNION or FUND, its WHEN to wind up the fund and REFUND contributions to the people owed it, this is WHY you were appointed/elected, this should have happened in 1993 to most pension schemes when contributions were foribly retained and the other contributor the employer stopped contributing. At this point all stakeholders should have been asked if they wished to remain in the schemes, the UCW, Trustees and Labour party did not Act in the interest of the employees and all the pension Black Holes are now nine years old. Happy Birthday PBH !!

  • Comment number 48.

    This The Directors comic strip from Private Eye seems to be relevant here. Of course, his figures are out by a factor of 500-1000, but the spirit is right.

  • Comment number 49.

    Re 38 Makerofsense...
    You are absolutely right.
    Many of these private pension schemes are little more than "goody funds" for the "establishment" to help themselves to.
    When any economic instability occurs, these funds get hammered.
    I have several friends whose private pensions have been wiped-out in the last 10 years.
    If you ask them about private pension funds, you'll get a stream of abusive language.
    But the financial industry has taken huge salaries and fees to run them.
    We're all being had.
    Given the choice....I personally wouldn't bother with them.
    The modern financial industry is unreliable and untrustworthy....and full of very rich people.
    The working man is the last in the queue....he just provides all the money.
    How did all those billions in contributions disappear?
    These days the City is full of very fast and sharp operators.
    Are the pension fund managers fast enough, or sharp enough?
    Or is it that pension funds are always the "fall guys" in recessions.
    If you're on the wrong end of a collapsed fund, you may have your own opinions about that.

  • Comment number 50.

    And I also feel that these City boys "laugh" at the pension funds.
    If there's any trouble they know who's going to get clobbered...the pension funds.
    It's all part of the sentiment that is so prevalent these days...that the City is a parasite, a leech.
    The "establishment" sucking on the blood, and effort, of the working man.

  • Comment number 51.

    There are some 'friendly' figures being posted up here.

    Firstly, 650 billion. Grant Thornton have for well over a year calculated the deficit to be over 1 billion. The government themselves have been unable / unwilling to answer questions on the exact amount for over 12 months. The latest calculation has been delayed over and over again.

    Also, it is very easy for people to point fingers and say 'this company took a pension holiday whilst paying directors millions' etc. There is of course a very good reason why they did this - legislation will heavily tax a pension fund which is more than 120% funded - Nigel Lawson I believe brought this in when times were good and before life expectancies started to get much higher - actuaries in those days were much more of a finger in the wind than today.

    If you want some real sense on what is happening in the world of pensions, both defined benefit and contribution, search for Steve Bee, John Moret or Roz Altman. Then at least you'll get an honest appraisal and some realistic figures.

    Defined benefit / final salary pensions are the pensions of the 1950s and have no place in the workplace today. MPs should do the decent thing and make an example by scrapping their own ridiculously generous pension scheme. The thought of me paying tax to fund Hazel Blear's retirement for the next 50 or so years on an unfunded basis makes me shudder.

  • Comment number 52.

    God Save Our Queen

    Elizabeth, your Country needs You!!! Please disolve Parliament and instruct new Elections, or call Mr Brown to the Palace and direct him to resign, together with his Government....

    Your loyal subjects are not just angry, we are MAD as HELL... These self serving politicans ate Westminster have finally and fully shot themselves in both feet. They are collectively shown to have little honour and almost zero integrity serving only there own selfish and narrow financial interests. They do not speak for me, any of them.

  • Comment number 53.

    "Then the state of public finances is far worse than we have been lead to believe."


    No wait. Very believable.

  • Comment number 54.

    Sometimes to solve a puzzle, we had to start by hypthesizing the objectives and work backwards to see how well events help to achieve the objectives.

    It is impossible to see clearly through the wall of spin, secrecy, distractions, smoke screens and lies.

    In public's interests, for national security and Hobson's choice are three most often used excuses for government's actions. If I take politicians and government at their words as the true, total and only objectives of their actions and inactions, then the events over the years do NOT fit the objectivs of public interest and security.

  • Comment number 55.

    "Maths certainly isn't your strong point then Bob!"

    Actually, it's perfectly possible - if you round down, say from 20.4bn to 20bn, and round up from say 29.5 bn to 30 bn (which is perfectly mathematically acceptable), then the difference between the two would be 9.1 bn, which rounds down to 9 bn.

  • Comment number 56.

    55. At 11:41pm on 11 May 2009, Dingdongalistic wrote:
    "Maths certainly isn't your strong point then Bob!"

    Actually, it's perfectly possible - if you round down, say from 20.4bn to 20bn, and round up from say 29.5 bn to 30 bn (which is perfectly mathematically acceptable), then the difference between the two would be 9.1 bn, which rounds down to 9 bn.


    It is partly due to that sort of accountancy that we are in the mess we are in today.

    Do lots of rounding, and then gear up many times on that figures, sell it, gear again, re-sell it, rinse and repeat.

  • Comment number 57.


    Got a job?

    Income sufficient to pay normal outgoings including your mortgage?

    Mortgage roughly twice your annual salary?

    If you answer yes to those questions then you no doubt think you are in a stable and acceptable financial situation.

    If you had to pay off your mortgage tomorrow, that would be diificult wouldn't it?

    But you don't; so relax.

    A little bit of perspective on debt.

  • Comment number 58.

    At this point, pondering just this one conundrum, let remember that anyone in public life who in the past twenty years uttered words such as 'We won't be able to afford this, this will take us over the fiscal cliff in the second and third decades of the 21st century.' was vilified as a heartless, racist, classist, money-grubbing skinflint by all shades of liberal political thought, and the media outlets who have served as their cheering section.

    Perhaps, just perhaps, those who raised the alarm were correct?

    At least in this country, we have the comfort of knowing the great leftist rags such as the NY Times, Boston Globe and CBS are going broke themselves.

  • Comment number 59.

    49 Its amazing how much money can be Made off with as a reward for looking after other peoples money, whilst leading them to the pummiced land overfowling with index linked pensioners ,that is UNTIL THERE is no MONEY left to look after.

    Too much money chasing too few ponzi's ,a recipe for suckcessfool failure .

    It just goes to prove that most people were spiritualy predisposed to believing the devils sirpant carnivalhorespinners that wormed their way into public orrifice with their importal words to the chicken littles "trust us, we dont pluck vegans " .

    Now all the AAA's holes within the great divide, shall have to form the aaamaaalgaaamaaaated hole borers union to keep their bottom lines from the light of payoutday until they are fooly replenished.

    Despite it being high noon in shadows for any to hide in and no cool stones to hide aaa'sunder.

    Some pollYtitians are telling us now , about how johny rotten the system is despite having enjoyed the wonderfool smell of the superBlaaairated gordonzi ponzi boomerangue pie in the sty for a decade.

    Who would have thought that our "sorry " dimocracy would triumph on the pure entertainment value of parlamments got talent and the latest stringed quartet of fiddlers to come out of the city pint pot sausage machine with their four skins inflated .

  • Comment number 60.

    # 3 WhiteEnglishProud

    "...then the state of public finances is far worse than we have been lead to believe ..."

    Some of us have known for a long time the true state of the public finances. Mr Peston highlighting the £650 billion state-funded pension liability is not news, it's just that it never features in the Government's propaganda. For those analysts and commentators that look behind the propaganda (or, like me, read their analyses), the figures relating to the UK economy are utterly shocking. The mainstream media rarely looks this hard at what the Government says; it just, er, reports what the Government says, or tells us that Britain's Got Talent.

    I have spent the past 2 years preparing my family circumstances for very troubled times ahead, which I would summarise as "learning self-reliance". The next decade will bring socio-economic shocks that few people - even the great Mr Peston - dare to describe and explain.

    In the next decade we'll experience the triple-whammy of the end of mankind's era of cheap energy, the appalling capability of the UK to supply energy in the medium-term and the likes of these unpayable state-funded pension schemes and other monstrous (and also unpayable) levels of public and private sector debt all hitting our society at once. Oh, and there's a recession (depression?) on by the way.

    The Royal Mail debt problem is just one of many 20th Century chickens coming home to roost at the beginning of the 21st Century. I would steel yourself for troubled times ahead. But you won't find too many details here in the BBC about how the world could look over the next 10 years; it could frighten the horses.

  • Comment number 61.

    folks, we are bankrupt,

    I believe that this time the union will crumble under the pressure, as the tension mounts over who will pay this back.

  • Comment number 62.

    Anyone got any ideas on when the big default will occur?

  • Comment number 63.

    Off balance sheet liabilities will continue. They are an easy way of diverting attention from the true costs involved.
    Maybe MP's are using this route to line their own pockets, without us knowing it.
    It could be that the current MP expense row has been created by the MP's themselves, in order to bolster their pensions before they are kicked out!
    It works like this. Our MP's get a reasonable salary, but nothing like the amount they would get if a proper salary comparison with public / private executives were carried out, so they use expenses to top up their pay. Remember that Gordon gets less than some senior civil servants, and directors in PLC's can get more pay than MP's - just consider the ex RBS crowd, and the bonus culture.
    The result of leaking expenses, is that we now have a cry of "we have to change the system", and could end up possibly increasing MP's pay to true comparible levels to reflect the importance of their job. Well paid persons do not want to take a salary decrease to enter Parliment, so you currently get a different type of person in the job.
    But suppose we do increase pay to attract better MP's, what about those who are there at the moment and expect to leave at the next election. Well, after changing they expense system, they would also have a pay increase as their expenses would be curtailed. Taxable Pay instead of non taxable expenses. Looks good.
    But this is great for them as they retire on a Final Salary Pension which because of the salary increase is now vastly improved.
    Example - after 10 years in the job (some have been there longer), with a one off 40K improvement in pay, this will improve the value of that individual MPs pension pot by well over 100K, even if he has only had the pay increase for a few days before being kicked out.
    We will not know this of course, as it is off balance sheet, so we believe we have solved the expenses problem, but in fact it has just cost the taxpayer an arm and a leg. An extra 100K times the number of MP's (over 600) to cover the extra pension they would be due. A lot of money (60 billion pounds). Makes the Post Office problem look insignificant!
    It could be avoided.
    A better result is buy a block of flats, look after them at tax payers expense, allocate one to each contituency, so the representative has a London home when they are elected, and let the tax payer keep any profit from property increases. No First / Second or third homes allowance.
    But that is just too easy, and therefore will not be adopted, as those who make the rules also operate the rules, and gain from them. Its all smoke and mirrors.
    Self regulation does not work!

  • Comment number 64.

    # 62 JavaMan1984

    "Anyone got any ideas on when the big default will occur?"

    Depends what you mean by "the big default", but some of us take the (considered) view that our political elites have punted the global economic crisis into the future, rather than resolved it. The absolutely fundamental problem (rarely reported or related to the near-collapse of the global financial system) is that we're staring the end of mankind's era of cheap energy in the face.

    (Apparently) infinite cheap energy has allowed us to assume (apparently) infinite economic growth and so to borrow like there was no tomorrow and to keep punting debt repayment (and galactic levels of state pension payouts and other welfare society benefits) into the future. Tomorrow has arrived, much to everyone's horror; the so-called credit crunch was the calling card. To answer your question: "the big default" could well play out from the second half of this year and into 2010. Goodness only knows what thereafter will look like, but with the oil price currently inflating at an annualised rate of 400% (not much reported), you may wish to prepare for difficult times ahead.

    The unmentionable £650 billion hole in Royal Mail's pension pot exemplifies the bigger problem and yet it is a truly minor detail in the forthcoming global economic landscape.

    Take a look at James Kunstler's Blog to get a realistic picture of the future, devoid of the propaganda peddled by the governments of developed economies.

  • Comment number 65.

    States fail and collapse when two things happen:

    (1)It has become impossible for the state to fulfill its promises of income security to retired people. It will be an actuarial impossibility for the government to fund public sector pensions in the near future. The government has raided private pensions and impoverished their holders. Those who have no private pension are cast on the mercy of a state which barely acknowledges their existence.

    (2) The government can no longer protect its people from crime and violence.

    Not my view, the view of respected historians. That is how Rome fell, and the Ottoman Empire too.

    We are a shaving away from the political collapse of the UK.

  • Comment number 66.

    Is this all a draft dor a new episode of Postman Pat?

  • Comment number 67.

    Posted on here before. On pensions, Frank Field is the main man,independent from government and he predicts a riot!

  • Comment number 68.

    Private pension funds are a failure.
    This is the third time in 20 years that they have failed.
    The 1990 recession, the dot-com-bubble-burst, the credit-crunch....all have badly hammered or wrecked the pension funds.
    The modern City is not the solid, stable City of the 50s and is a free-for-all. Can the slow old pension funds really compete with 50 thousand Gordon Geckos?
    The working man keeps paying, and getting poorer, whilst those City boys keeping taking, and getting richer.
    Why does anyone bother contributing?
    Although the Royal Mail Fund has the extra problems of competition and the internet to deal with, all private pension funds share the same fate.....they are SITTING DUCKS.

  • Comment number 69.

    As an employee of 34 Years, I am very sad that you and the public in general have forgotten what happen to Royal Mail in the Eighties and Ninties. During this time various Goverments took money from the profits made my Royal Mail and instead of investing them in the buisness or the pension they took them to ease the National Dept. All this time Royal mail was taking a pension holiday and thus contributing the goverment and its pension deficit.

    It is only right that the goverment of the day should take on the responsibility of the pension scheme.

  • Comment number 70.

    I guess what I'm trying to say is that the City "eats pension funds for breakfast".

  • Comment number 71.

    All this talk of switching assets and juggling pension liabilities around has brough that infamous Labour financier Robert Maxwell back to my mind.

  • Comment number 72.

    Another word for this would be HYPOCRISY.

    On the day the Government HAD TO APOLOGISE about the EXPENSES FIASCO, and state they need to REGAIN THE TRUST OF THE PUBLIC, they were busy in the background working out MORE WAYS TO FIDDLE THE FIGURES (just like the bankers). In this case they want to make out they are starting to pay off national debt, when they are actually stealing yet more money from ordinary taxpayers for generations to come - see summary below:

    "Well, the logic of ministers appears to be that we won't notice we've taken on this £30bn burden, because the government's commitment to pay pensions to public-sector workers in unfunded pay-as-you-go schemes - which is what the Royal Mail one will become - is not part of the national debt ... the total liability of unfunded public service occupational pension schemes as at 31 March 2006 was £650bn - or about 50% of GDP in that year ... and the liability will be much bigger now!"

    This is another disgraceful example of POWEROMICS* at work, but it has not gone unnoticed or unreported. To further overburden an already unfunded "pay-as-you-go" government pension scheme at this point in time, with the demographics shift about to occur, is frankly dishonorable and scandalous ... and to do this in the hope we won't notice is equally scandalous too!

    HMG have already started to show what they see as a 'new era' of responsibility and the way they PLAN TO REGAIN TRUST - THROUGH SPIN'! Do leopard's change their spots? Does a change of 'color' result in a chameleon changing its DNA?

    I think not - and neither will most ordinary people - however much spin they put on it! Let's start to tell more people about the real story and about the independent blogs that are telling it. We need to use the internet to join forces and create a community of strength ... as this is the only way people in positions of power take notice!

    For instance take a look at the BLOG at ... set up to highlight more examples of the application of POWEROMICS (which includes the BBC too**) and to point to other independent sites too.

    David Clift
    a Future 500 leader

    * POWEROMICS = People use position and power for their own personal gain, based on poor moral values, self interest and greed.

    ** Let's see if the BBC remove this post because of this point. I'll tell you if they do.

  • Comment number 73.


    What makes you think increasing MP's pay will get us 'better' MP's, rather than just greedier ones?

  • Comment number 74.

    Only 650 Bn GBP! Come on, does anyone actually believe any figure calculated by the Government's actuaries!

    Actuarial valuations might once have been done to the best of their knowledge and skills, but as the figures have such an important commercial consequence to Banks etc. there has been a corrosive eroding of their figures in recent decades. (It works like this, if you run a pension fund or write annuities if the length of peoples' lives goes up your costs go up and in consequence your profits(and bonuses) go down.) This effect works through to the Government's actuaries.

    It should also be noted that the more effective the NHS is the higher the future pension liability! So run a bad NHS that 'kills' more people and the books look better. (also true of smoking, drinking etc.)

    Life tables do not reflect the reality of life expectancy and in consequence nor does the 650 Bn GBP! The whole pension's business is a mess and must be gambling on a really bad pandemic!.

  • Comment number 75.

    What is all this doom and gloom about pensions? We have to move on, leave the old ways behind, and embrace the modern world. Remember Tony Blair and the "third way" - Well this is it, it is time for many millions of us to check out Virtual Pensions.

    Britain has a real opportunity to lead the way in the Virtual Pensions business. Let´s not ruin this opportunity by petty moaning.

    Even if Virtual Pensions don´t work out so well - we are still hedged, lots of people like MP´s and ex-bankers still have real pensions. It is true that their real pensions pay out a lot of real cash, but then they need to in order to make the hedge work - through the miracle of trickle down economics. Surely you remember voting for Thatcher, an arch exponent of trickle down economics, well this is it in practice. Be happy, rejoice.

    Look at all the work generated by maintaining moats and helipads - I don´t think too many postmen have helipads or moats. They are not going to provide any work. They will not contribute to trickle down economics, so who cares whether they have a pension or not.

    What is wrong with spin and fictitious accounting? All the banks are now healthy. Sure the economy has continued to decline - but that has been more than offset by changing the accounting rules. If it works for banks then it can work for governments too. In Britain we are very lucky - we have the best government in the world when it comes to spinning and fiddling numbers - true world beaters. Carpe diem!!

  • Comment number 76.

    The basic idea behind saving the market appears to be revealing the true modern face of capitalism: Its not about generating wealth its about accumulating what there is and then pretending you generate it. If that goes wrong - as it seems to every time too many people join in and play the game - then you just make sure 'everyone else' gets screwed (the taxpayer) leaving the increasingly parasitic parts of the market in charge again.
    Recessions are a vital part of the economic cycle - they weed out the bad players. Or they used to! I can see why the Telegraph is having such fun with MPs expenses - they've actually found some people more morally bankrupt than financiers to use as a smokescreen for a while!

  • Comment number 77.

    This only confirms my belief that we shall have to be prepared for high inflation within the next couple of years as Government desperately tries to reduce the value of its liabilities. This will be the worst of all possibilities but will be the only one left.

  • Comment number 78.

    The bloggers on here have got the pension industry sussed out.
    "Virtual pensions".....I love it, and spot-on.
    And as one of you has hinted....."The Robert Maxwell guide to the pensions industry"....just £5.99 at your nearest bookshop.

  • Comment number 79.

    "The Robert Maxwell guide to the pensions industry", allegedly, of course.

  • Comment number 80.

    whose to rise their hand and say that the private buyer of RM will not milk every last possible drop out of it before lunging it back at us taxpayers crying for a public sector bail out? Oh what am I thinking, something like this surely can not happen, can it?

    Oh did someone just said Northern Rock?


  • Comment number 81.

    At 2. above BankSlickerminustheR wrote:
    Bob wrote:
    'Royal Mail's assets - at 16 December - have a value today of just over 20bn. But its liabilities are worth around 30bn.
    So for poor, beleaguered Royal Mail, there's a gap between the assets and liabilities - a de facto and crippling debt - of around 9bn.'
    Maths certainly isn't your strong point then Bob!

    Wikipedia appears not to confirm that any of Major (no degree), Blair (Jurisprudence), Brown (History degree), Darling (Law degree), Cameron (PPE), Osborne (Modern History) or Bob (?) gained the hard 'A' levels in Mathematics. Can anybody help clear up whether these leaders have proved a sound grasp of counting please? It is accepted that they have all mastered 'Media'.
    Does this horrible mess simply derive from the old adage 'Do not send your son to market if he cannot count!'
    P.S. Thatcher (Chemistry degree, which I guess meant she may have achieved Maths 'A' level?)

  • Comment number 82.

    Meanwhile in the real world

    So much for green shoots!

  • Comment number 83.

    Dear Robert

    Well done to John Ralfe for doing the figures and you for publicising them. As to this government it is yet another shameful effort at fiddling the figures.

    Sadly this is the sort of thing many people expected when Peter Mandelson returned to the government.....

  • Comment number 84.

    #81 stmewan "Wikipedia appears not to confirm that any of Major (no degree), Blair (Jurisprudence), Brown (History degree), Darling (Law degree), Cameron (PPE), Osborne (Modern History) or Bob (?) gained the hard 'A' levels in Mathematics. Can anybody help clear up whether these leaders have proved a sound grasp of counting please? It is accepted that they have all mastered 'Media'.
    Does this horrible mess simply derive from the old adage 'Do not send your son to market if he cannot count!' "

    As a mathematician myself, I wish I could support you, but look at the following:

    Sir Tom McKillop (RBS) Chemistry Ph.D
    "Sir" Shred (RBS), lawyer and chartered accountant (ie numerate)
    "Sir" James Crosby, mathematics Oxford.

    What these people did not have was sufficient knowledge of history, or sufficiently inquiring minds, to question the models they were following.

    It takes courage to imagine what could go wrong. We need engineers with a knowledge of history.

  • Comment number 85.

    What else has this government shoved under the carpet? It is time GB and his bunch of freeloaders came clean and opened the accounts to the nation so we can all see the risk they have exposed us, our children and their children to. 100 years ago we would all have taken to the streets with arms to remove this lot. Has apathy destroyed patriatism?

  • Comment number 86.

    #82. Ian_the_chopper wrote:

    "Meanwhile in the real world

    So much for green shoots!"

    Did you bother to read beyond the headline of that story?

    "March output was down 0.1% month on month, its smallest fall in 13 months...

    The UK's trade deficit narrowed to £2.5bn in March from £2.8bn in February, which was also better than had been expected...

    We've already seen the impact of the weaker pound on inflation, now we are starting to see the benefit in terms of a narrower trade deficit..."

    There's too much hysterical talking-down of the economy on this blog.

  • Comment number 87.

    Is it time to rename the Ponzi scheme to the Brown Scheme......

  • Comment number 88.

    Just remind me; who has been at the head of this deal? Mandleson. So why are you surprised at anything then?

  • Comment number 89.

    This blog seems to start with the assumption that the government are doing nothing more shady than solving an immediate problem with a little dodgy accounting, hoping to distract our attention whilst they lose £10bn. Doesn't their continued belief in privatisation demonstrate an unshakeable loyalty to the unregulated free market, and a belief that it will continue to work its alchemy with the economy, in spite of what the banking crash has taught the rest of us?
    The markets aren't interested in the £30bn debt - that's for us to take care of, and Mandelson and his cronies may well be acquainted with some of the beneficiaries of the £20bn windfall that he'll create for them. Maybe he came up with this idea whilst spending the summer on somoene's yacht? Let's be clear, the nett loss will be much closer to £30bn than £10bn...

  • Comment number 90.

    figure fiddling is systemic throughout all government agencies. From the BBC's news page today, SOCA announce that the 'World cocaine market 'in retreat' they say that the price has risen from 35000ukp to 45ukp in two years. Thanks to the power of the internet, a quick search shows that the exchange rate between UK pounds and US dollars (the currency cocaine is priced in on the world market) has changed dramatically.

    May 2007 1 UKP = 1.99 USD
    May 2009 1 UKP = 1.51 USD

    35grand bought ~ 69600 USD in 2007
    and 45grand buys you 68800 in 2009

    If anything the world price of cocaine is stable or dropping

    Why do they bother publishing stuff when it is so easy to find out the truth

  • Comment number 91.

    Evening all,

    This government is more stupid than criminals. It doesn't seem to realise we are on to them.

    Moving 10 billion across to the public pension pot will of course highlight the public pension black hole (created by the 45 labour govt) which has been lying there for decades.

    So Peston lad what is the government borrowing level INCLUDING public pension liabilities?

  • Comment number 92.

    Isnt it about time that Golden Pensions of Public SXector workers are stopped for ALL new employees? Just the same as most Private Companies did in the early 90's? New employees should be paying into their pension pots, not relying on the rest of the tax payers to fund their "free" pensions.

  • Comment number 93.

    The government loves stating that our debt is less than other countries. But what is it when PFI, Railtrack and this lot is taken into account? The highest in the Western World is my bet.

  • Comment number 94.

    Robert Maxwell?
    Hang on a minute.
    Maxwell was a saint compared to this current government.
    Anything Maxwell did only ever affected the pensions of a few thousand people.
    This government is busy DESTROYING the pensions of MILLIONS.

  • Comment number 95.

    Yet more manipulations and shenanigans.

    Isn't this how the banks got into trouble?

    Isn't this how Stanford ended up in his mess?

    Perhaps they all have swine flu?

    Maybe they should visit:

    [Unsuitable/Broken URL removed by Moderator]

    Hopefully someone creates a website called:

    Can't someone hide the pension deficit in their expenses claims?

  • Comment number 96.

    Post 86. If you had read the next paragraph after your quotation you would have read the following

    "Industrial production, a wider measure which includes energy supply, mining and oil and gas as well as manufacturing, fell 0.6% in March compared with February, making an annual fall of 12.4%, which was the biggest since records began in 1968."

    I might be talking the economy down, in your opinion, unnecessarily but equally all is not rosy.

    Admittedly the worst figures since 1968 were as the article goes on to say

    "The industrial production figures are significantly better than expected and the February fall was revised sharply upwards," said Philip Shaw, chief economist at Investec.

    So if the anuual figures are the worst for 40 years but still better than some expected then we really all can't go out an celebrate.

    Statistics can be used to paint whatever picture people want. For example how do you think the big drop in inflation caused by the drop in oil prices and mortgage costs will be spun by the government?

  • Comment number 97.


    Unfortunately I have to report I have failed in pursuading a 17th century Cromwellian battle re-enacment society to march on Westminster, then read out the roll of dishonour as sugested in post 17 followed by Cromwells famous speech when he kicked out the corrupt parlaiment 'no longer can you be allowed to defile this sacred place' etc.

    They expressed a great deal of sympathy for the cause and gave a long list of reasons why they could not paraphrased as follows:

    Ban on demonstrations in parliament square

    Health and safety regulations (those pikes and swords they use are real you know)

    Police unlikely to grant permission (see above)

    Members not willing to march without pikes or swords or muskets not because they intend to use them in anger but would just look silly and would detract from the point of historic accuracy and the message to be portrayed.

    They would not be able to get insurance for such an event.

    It would have to be volunters only due to the political nature (although they expected there would be quite a few turn up)

    Cromwells speech is as relevent today as it was then, you can even see the parallels right up to a certain 'Charles' taking the throne. History repeating itself indeed.

    Anytime you try to do something that is ambitiuos, artistic and inspiring to your fellow man you fall foul of one rule or regulation or another to stifle it. They dont chop off your heads now adays but the control measures in place as just as effective.

    We dont live anymore, we comply...unless you are rich and can afford to pay someone to negotiate the red tape on your behalf.


  • Comment number 98.

    Well, well, well.

    I've been away for a few days and my how the world has changed.

    So then, start with Royal mail.
    Following the revelations that the MP's have been on expenses fiddle for years - can anyone trust them that they are not conning us now? How do we know that one of our 'dis-honorable members' hasn't accepted a new pool from TNT or another Royal mail suitor in order to make this deal happen?

    To all those posters out there who think regulation will prevent a repeat of the banking crisis I have on question.

    How can a regulator that is assigned by greedy and selfish MP's regulate the infamous 'greed and selfishness' of the banks that got us into this mess?


    If anyone can tell me why the morally corrupt can prevent moral corruption then I shall be very interested to hear it.

    .....back to the mail....

    I said it before and now Robert is repeating it - there is no private company that will take on RM with that pension black hole. The only way this will get sold is if the Government makes commitments to the black hole.

    This means (because the Government aren't creative enough to come up with anything else) the liability will be endured by the TAXPAYER.

    That's right folks - line up and bend over because here come the Government again....

  • Comment number 99.

    is this a simple case of robbing Peter to pay Paul??????????

  • Comment number 100.

    #86 we maybe seeing a levelling off for a while, as "engineered" by Brown and Co to save only one job, his. The real pain is going to be
    when somebody takes the really tough decisions that were avoided at the Alice in wonderland budget of 09 in the hope that they could win the election and do more creative accounting. The we will decline even more or flatline for decades. The borrowed money and interest will have to be accounted for some how, inflation , tax rises and or cuts prob all 3.

    All in a effort to save one man's job


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