28BN PENSION LIFT FOR TREASURY

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THE Treasury reported a record £16.5billion budget surplus in April, thanks to the transfer of assets from the Royal Mail pension fund.

Public finances were given a short-term boost by the one-off transfer of £28billion of Royal Mail assets, the Office for National Statistics said.

A Treasury spokesman said the windfall would be used to cut debt, not fund extra spending.

However, excluding the impact of the pension transfer, public sector net borrowing in April came in at a higher than expected £11.5billion

Chancellor George Osborne’s deficit-busting plans were helped as total public sector borrowing for 2011/2012 was revised down by £1.6billion to £124.4billion, a reduction of more than £12billion over the previous year.

A Treasury spokesman said: “Despite the challenges the recovery is facing from the eurozone and elsewhere, the Government is making good progress in dealing with the deficit.”

Earlier this year the European Commission approved plans to nationalise the Royal Mail’s pension scheme, allowing the Government to privatise the group without its huge pension plan liabilities. The pension assets will be sold later when the Royal Mail is privatised.

But Howard Archer, chief UK economist at IHS Global Insight, said: “It is not the start to fiscal year 2012/13 that George Osborne would have been looking for.”

The Office for Budget Responsibility said the long-term impact of the Royal Mail transfers “is likely to be negative” for the taxpayer as the state will shoulder pension payments expected to total £37.5billionsion-lift-for-Treasury

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A Treasury spokesman said the windfall would be used to cut debt, not fund extra spending.

If its being used to pay of government debt then its being spent.

8 billion pounds of pension assets spent since the government took responsibility for our pension.

Robert Maxwell was rightly vilified for heisting a mere £400 -450 million from his employees pension.
the government just robbed us of 16 times that.