The Government intend to put the Postal Services Holding Company Limited into voluntary liquidation on 30 March 2017. This company, previously known as Royal Mail Holdings plc, is wholly owned by Government.
The Government have decided that, following the disposal of all of the Royal Mail shares held by the company, there is no longer a need to retain the company. The voluntary liquidation will save the taxpayer money by removing the company’s running costs of around £120,000 per annum.
Shares held by the company in Post Office Limited (POL) will be transferred to direct ownership by the Secretary of State for BEIS and this transfer will have no impact on POL’s operations.
The directors of the company (all unremunerated, public or civil servants) are required to issue a Declaration of Solvency prior to the company’s liquidation.
The expectation is that all the company’s identified and existing liabilities will be met, apart from minimal expenses incurred during the liquidation process, after placing into to liquidation.
However, there is a small risk that some as yet unidentified liabilities could emerge. To give the directors comfort that such liabilities could be met, and to enable them to sign the Declaration of Insolvency, my Department intends to grant an indemnity to the Postal Services Holding Company Limited. The granting of an indemnity is effectively neutral to BEIS because if the company were not placed into liquidation and a liability emerged, the company would look to work with the Department, as sole shareholder, to address that liability.
The indemnity will be uncapped for a period of six years and will be issued prior to the liquidation.
When a Government Department proposes to undertake a contingent liability in excess of £300,000 for which there is no specific statutory authority, it is required practice for the Minister concerned to present a departmental minute to parliament giving particulars of the liability created and explaining the circumstances; and to refrain from incurring the liability until fourteen parliamentary sitting days after the issue of the minute, except in cases of special urgency.
As a matter of record I have attached a departmental minute for both Houses explaining the procedure followed and containing a description of the liabilities undertaken.
Attachments can be viewed online at: http://www.parliament. uk/business/publications/written-questions-answers-statements/written-statement/Commons/2017-03-06/HCWS519.