Negligence puts Royal Mail at risk: Government should have learned from Thames Water disaster, says ALEX BRUMMER

The current generation of British politicians is on a steep learning curve.

There can be no excuse for indifference when the fate of a vital national asset is at stake.

Minority investors are increasingly concerned that the Government and the board of International Distribution Services (IDS), which owns Royal Mail, will allow the postal service to be sold cheaply for £3.6bn to a Czech billionaire who has not undone completely. Russian connections.

As The Mail on Sunday revealed, IDS 27.56 per cent shareholder Daniel Kretinsky is embroiled in a £174m dispute with a Russian company that allegedly defaulted on a contract when war broke out with Ukraine in 2022. .

The legal dispute shows the depth of Kretinsky’s PE Group’s past entanglement with President Putin’s Russia.

The scale and depth of this involvement, and that of the Czech predator’s allies, should have made “foolish” Business Secretary Jonathan Reynolds hesitate before describing Kretinsky as a “legitimate businessman.”

Reynolds could have waited until he had seen the full results of the National Security and Investment (NSI) review before making such a judgment.

If you have the NSI verdict, you have a responsibility to share the findings with the public to give them confidence that the Royal Mail, which began life in Tudor times as a secure means of communications, is not falling into the wrong hands.

The lack of political curiosity about an agreement that affects all our lives is surprising. The last thing Britain needs, as manufacturing and business confidence plummets, is another bad decision in Whitehall.

The fate of foreign-controlled Arm Holdings and Thames Water, a bankrupt utility, should raise alarm bells in the Cabinet and in Whitehall.

The suspicion must be that Labor is very happy not to have to deal with the Communications Workers Union, which is understandably seeking to inoculate itself against layoffs and wage freezes. The IDS board also wants to get rid of its sometimes problematic union colleagues.

Minority investors, such as Abrdn, Blackrock, Vanguard and activist Redwheel, have different concerns.

Their eyes are on Ofcom’s review of the Universal Service Obligation (USO). It’s proving a slow process and, meanwhile, rivals are eating Royal Mail’s pie by offering superior reliability and tracking.

Market testing, consultation and final USO resolution are expected in summer 2025. It could potentially be favorable to Royal Mail’s desire to improve failed First Class deliveries and downgrade Second Class deliveries.

The offer price of the IDS that is on the table will be considered a bargain. Fast-growing European parcel delivery, Global Logistics Services, will be included in a gift valuation.

There are solid commercial and security reasons why the Czech offering of the Kretinsky Sphinx should be stopped. A government knee-deep in sewage discharged by Thames Water should recognize the dangers.

dutch courage

Unilever Chief Executive Hein Schumacher has been frugal in his media dealings since taking charge of Unilever, Britain’s largest consumer goods group, 16 months ago.

He opened up to the Dutch press and revealed that the company is preparing to offload around £1bn of redundant Dutch brands.

It also plans to sell food brands in Britain and told Dutch financial daily FD that the group has a “quite eclectic portfolio of brands.”

UK investors, consumers and colleagues would be fascinated to know whether esteemed brands such as Marmite are available for disposal.

Schumacher also needs to clarify whether the spin-off and listing of the ice cream brands will take place, as it should, on the London Stock Exchange.

Debt anxiety

Britain made a costly mistake when it allowed 25 per cent of our national debt to be indexed to inflation.

When inflation soared after the pandemic and amid the war in Ukraine, so did taxpayers’ bills.

The Debt Management Office is asking government bond market players whether they would prefer a new 35-year bond to be a conventional offering, with a predictable coupon or linked to an index.

An indexed bond would certainly be attractive. But it would add new risks to overstretched public finances.