CWU Complaint:BBC's Robert Preston

[POSTMAN]

LTB:

Dear Colleague
Robert Peston – BBC News At Ten : Monday 23rd February
BBC News at Ten carried a report on Royal Mail Pensions.

Attached as Appendix 1 to this LTB is a direct quote from the report.
Immediately following the report on News at Ten by Robert Peston, the General Secretary contacted the BBC and lodged a formal complaint. Together with this he spoke to the News Editor to complain about the Robert Peston piece along the following lines:

As will be seen from Robert Peston’s piece on Royal Mail, the General Secretary challenged the balance and impartiality of Robert Peston on the whole subject of Royal Mail.
Robert Peston, in his book “Who Runs Britain” stated the following:
“The chapter on the travails of Royal Mail (Chapter 9) is something of an indictment of the Government’s refusal to privatise the postal service”
From this it could be argued Robert Peston could not give a balanced view as he has a particular view that Royal Mail should have been privatised long ago.

Together with this, since the report the General Secretary has spoken to a number of BBC journalists and it appears that the so-called “leaked letter” was in the public domain for sometime.

Also at Appendix 2 to this LTB is the direct quote from his book. The book is currently in paperback and is a best seller.
The General Secretary has written to Mark Thomson, Director General of the BBC, to complain about allowing what can be argued as unfair reporting. He has also written in a similar manger to the Secretary of State for Culture, Andy Burnham, about the matter.

[POSTMAN]

APPENDIX 1

BIG BACK DROP £1.3 TRILLION

ROYAL MAIL

George Alagiah,
Now Robert joins me now, now we have just heard you talk about the exposure to the banks, but you have got some news about a potential liability, an extra liability, this time Royal Mail.

Robert Peston,
Yeah that’s right I’ve got a really deeply shocking letter here. The Chairman of the Trustees, Royal Mail’s Pension Fund, and she says some shocking things about Royal Mail.

She talks about it being balance sheet insolvent, but she also talks about the pension fund and she says on certain assumptions, it’s hole, the deficit in the fund, could be more than £5.9 billion pounds, actually more than would be affordable the official safety net the Pension Protection Fund.

It’s quite extraordinarily alarming news about the weakness of the pension fund. Now some people will perhaps smell a bit of a conspiracy here er in the timing of the disclosure, it’s been sent to Peter Mandelson the Business Secretary he, of course, on Thursday will announce measures to begin the process of legislation for partly privatising Royal Mail – something which a lot of Backbench Labour MPs hate and what, interestingly, is Chairman Trustees sez, the Pension Fund Trustee mess would be a lot less if what Peter Mandelson wants to do partly privatise Royal Mail goes ahead, so some will say this is a little bit of a cynical link.

GA
Alright Robert, thank you.

ENDS

[POSTMAN]

APPENDIX 2

THE BOOK:
WHO RUNS BRITAIN?

Currently 2009 best seller in paperback, with chapter on Allan Leighton and Royal Mail.

Quote Robert Peston ‘… But the point of this book is certainly not to argue that free markets are in general a bad thing. The chapter on the travails of Royal Mail (Chapter 9) is something of an indictment of the Government’s refusal to privatize the postal service. What the book tries to do is provide a tourist’s guide to a new world in which …’

Bottom of page 22

Who Runs Britain? (How the super rich have changed our lives) by Robert Peston 2008, ISBN 978-0340 83942-3

Hardback edition
(page …. Paperback)

[POSTMAN]

Postal Services Review

Further to our meeting of 13 February, perhaps I could confirm the trustees' views in respect of the Hooper report, in so far as it affects the Royal Mail pension plan.

Let me reiterate the trustee's position. The trustee has a fiduciary duty to protect the benefits of the 450,000 members of the Royal Mail pension plan. The trustee's prime concerns, therefore, are the security of members' benefits and the strength of the covenant of the plan sponsor.

As you know, Royal Mail's position is weak in respect of its covenant and there is a significant pension fund deficit, which is a long-term drain on the company's cash. Royal Mail is already balance-sheet insolvent.

If the recommendations of the Hooper report were not implemented, the consequences could be very severe indeed for the Royal Mail pension plan and for Royal Mail itself.

In particular, in light of the weakness of Royal Mail, the trustee would consider it necessary to seek to significantly strengthen the funding basis for the 2009 actuarial valuation.

On a self-sufficient basis, this would value the liabilities far higher, resulting in a deficit that would be significantly larger than the £5.9bn quoted in the Hooper review, which is on the existing ongoing basis.

The law gives the trustee and Royal Mail until 30 June 2010 to agree this valuation.

Whatever its precise amount, the deficit resulting from a strengthened funding basis for the 2009 valuation is highly unlikely to be affordable by Royal Mail, with potentially devastating consequences.

If this were the case, the plan's financial resources would not be sufficient to provide the full value of benefits, which would need to be very significantly reduced. At present, in a winding-up, the plan would not even be able to provide as much as 50% of members' benefits.

In theory, the pension protection fund would act as a safety net for members, but I would not like to speculate on its ability in practice to absorb the plan without putting an intolerable levy strain on remaining UK pension schemes.

Consequently, the trustee of the Royal Mail pension plan, subject to obtaining satisfactory guarantees from government, is in favour of the Hooper report's recommendations.

We very much look forward to these being implemented, as soon as possible, for the benefit of all concerned.

Jane Newell

[norbert]

LTB:

Dear Colleague
Robert Peston – BBC News At Ten : Monday 23rd February
BBC News at Ten carried a report on Royal Mail Pensions.

Attached as Appendix 1 to this LTB is a direct quote from the report.
Immediately following the report on News at Ten by Robert Peston, the General Secretary contacted the BBC and lodged a formal complaint. Together with this he spoke to the News Editor to complain about the Robert Peston piece along the following lines:

As will be seen from Robert Peston’s piece on Royal Mail, the General Secretary challenged the balance and impartiality of Robert Peston on the whole subject of Royal Mail.
Robert Peston, in his book “Who Runs Britain” stated the following:
“The chapter on the travails of Royal Mail (Chapter 9) is something of an indictment of the Government’s refusal to privatise the postal service”
From this it could be argued Robert Peston could not give a balanced view as he has a particular view that Royal Mail should have been privatised long ago.

Together with this, since the report the General Secretary has spoken to a number of BBC journalists and it appears that the so-called “leaked letter” was in the public domain for sometime.

Also at Appendix 2 to this LTB is the direct quote from his book. The book is currently in paperback and is a best seller.
The General Secretary has written to Mark Thomson, Director General of the BBC, to complain about allowing what can be argued as unfair reporting. He has also written in a similar manger to the Secretary of State for Culture, Andy Burnham, about the matter.

He's always been an ardent Thatcherite - the " lefty " BBC eh ! - quite a few of the Liberal Papers put right wing columnists in to wind their readership up

[brothermagrew]

Postal Services Review

Further to our meeting of 13 February, perhaps I could confirm the trustees' views in respect of the Hooper report, in so far as it affects the Royal Mail pension plan.

Let me reiterate the trustee's position. The trustee has a fiduciary duty to protect the benefits of the 450,000 members of the Royal Mail pension plan. The trustee's prime concerns, therefore, are the security of members' benefits and the strength of the covenant of the plan sponsor.

As you know, Royal Mail's position is weak in respect of its covenant and there is a significant pension fund deficit, which is a long-term drain on the company's cash. Royal Mail is already balance-sheet insolvent.

If the recommendations of the Hooper report were not implemented, the consequences could be very severe indeed for the Royal Mail pension plan and for Royal Mail itself.

In particular, in light of the weakness of Royal Mail, the trustee would consider it necessary to seek to significantly strengthen the funding basis for the 2009 actuarial valuation.

On a self-sufficient basis, this would value the liabilities far higher, resulting in a deficit that would be significantly larger than the £5.9bn quoted in the Hooper review, which is on the existing ongoing basis.

The law gives the trustee and Royal Mail until 30 June 2010 to agree this valuation.

Whatever its precise amount, the deficit resulting from a strengthened funding basis for the 2009 valuation is highly unlikely to be affordable by Royal Mail, with potentially devastating consequences.

If this were the case, the plan's financial resources would not be sufficient to provide the full value of benefits, which would need to be very significantly reduced. At present, in a winding-up, the plan would not even be able to provide as much as 50% of members' benefits.

In theory, the pension protection fund would act as a safety net for members, but I would not like to speculate on its ability in practice to absorb the plan without putting an intolerable levy strain on remaining UK pension schemes.

Consequently, the trustee of the Royal Mail pension plan, subject to obtaining satisfactory guarantees from government, is in favour of the Hooper report's recommendations.

We very much look forward to these being implemented, as soon as possible, for the benefit of all concerned.

Jane Newell

Source House of Commons Trade & Industry Committee Industrial Action at Royal Mail Oral Evidence 22nd October 2007:

The principle objectives of the Agreement are:
— the Mails Reserve on Royal Mail’s balance sheet to be utilised to fund the “Holdings” escrow
reserve (to be held on Royal Mail Holdings plc’s balance sheet) and to ensure thatHMGprovides
funding to top this up to £850 million;
— Royal Mail Group plc to set up a “Mails” escrow and to transfer £150 million into it;
— the Holdings and the Mails escrow accounts (totalling £1 billion) to be used to provide security in
favour of the company’s pension fund trustees;
— the extension and rolling forward of certain debt facilities on commercial terms consistent with
the Market Economy Investor Principle as it applies to state aid;
— the agreement that Royal Mail can implement a phantom share scheme to provide employees with
entitlements of a value over the period of the plan equivalent to a 20% economic interest in the
projected value of the Royal Mail group of companies on the basis of management’s plan.
The extended debt facilities are:
— £900 million senior debt facility, repayable in 2014 at commercial interest rates; and
— £300 million Shareholder loan, repayable in 2016 at commercial interest rates.
The agreement then sets out certain technical issues including:
— the mechanism for topping up the Mails Reserve and the creation of the escrow accounts. The
Holdings escrow was to be created and credited with amounts from the Mails Reserve by way of
a direction from the Secretary of State under section 72 of the Postal Services Act 2000;
— that the Royal Bank of Scotland is the custodian of the escrow accounts;

Bottom line says it all - look who the custodian is

[DGP1]

— that the Royal Bank of Scotland is the custodian of the escrow accounts;

Bottom line says it all - look who the custodian is

Soon they'll be more owned by the Government than we will

But I hear they have a great pension scheme

[MEL]

lol