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The government is not just making grand gestures, such as scrapping planning laws and creating a National Wealth Fund to boost British investment in green technologies.
Labour’s legacy includes the debt crisis at Thames Water, unfinished work on the conversion of Port Talbot from coking coal to electric arc furnaces and a Labour challenge from engineering pioneer James Dyson.
All these issues can be addressed, but they require brave decisions. Thames Water chairman Adrian Montague believes the water giant, with 16 million customers in London, could become an investment target again if regulator Ofwat allows it to set generous price increases – there has been talk of between 40 and 60 per cent.
Labour may allow Thames to be placed into “special administration” like electricity firm Bulb, at public expense.
Off the rails: In his role as chairman of Royal Mail owner IDS, Keith Williams (pictured) has just ended the postal service’s two-century relationship with rail freight.
Or it could allow inflation-fighting price increases, which would justifiably prompt howls of despair from consumers.
Dilemmas can be avoided with courageous decisions. The Labour Party has shown that it can be bold.
National security adviser Tim Barrow has been sacked as Britain’s next ambassador to Washington because the government wants a more senior political figure.
Next to be made redundant will be Keith Williams, chairman of Great British Railways. As chairman of International Distribution Services, which owns Royal Mail, he has just ended the postal service’s two-century relationship with rail freight.
Royal Mail will cut ties with DB Cargo UK from 10 October, dealing a blow to the sector and making the target of increasing freight services by 75 per cent by 2050 seem nonsensical.
Williams is betraying the railroads.
He has also caved in to a £3.6bn bid for Royal Mail from “Czech sphinx” Daniel Kretinsky.
Business Secretary Jonathan Reynolds has remained silent on the Royal Mail takeover despite a stated commitment to look into it closely.
He now has good reason to step in, demand Williams’s head and block the sale to Royal Mail.
Thames Water provides all the evidence Reynolds needs that highly leveraged foreign takeovers of utilities are an unmitigated disaster.
Billions of pounds are flowing overseas – some to the tax haven Cayman Islands – instead of being invested in wastewater treatment.
The postal identification system is central to UK public services. Plans to tackle falling postal volumes through a more expensive first-class service and investment in parcel delivery offer a way forward.
Its European logistics subsidiary, GLS, is a fast-growing, cash-generating asset. And there is extraordinary value to be extracted from Royal Mail’s rich property portfolio. Development should be easier now that Labour is removing planning restrictions.
Reynolds must act quickly before Kretinsky, with 27.5 per cent of the shares, makes off with the spoils of Royal Mail. Replacing Williams with someone willing to stand up to the looters should be a priority.
Stimulating housing
After the high-sounding rhetoric when Chancellor Rachel Reeves bravely reinstated mandatory targets for housebuilding, there is a dose of reality from FTSE 100 developer Barratt.
The involvement of planning agents, using brownfield and grey areas and extending into the green belt, will be helpful.
The reality is that high mortgage rates, shortages of building materials and skilled workers make it difficult to push the stone uphill.
Barratt reports a 19% reduction in completions in 2024 and warns of a further decline of up to 7% in the year to June 2025.
Troubled builder Crest Nicholson is preparing to recommend a £720m bid from rival Bellway.
The fewer homebuilders there are, the weaker the regional opportunities and the less competition there will be.
The aspiration to boost growth by targeting the construction of 1.5 million homes by 2029-30 is worthy but impractical.
The Tyne is rushing
Switzerland’s Pictet Alternative Advisors is funding a management buyout of Gateshead-based Technology Services Group, which provides Microsoft-approved software, cloud computing and artificial intelligence services to Britain’s small businesses.
Taking a step back from the fray is software pioneer Sir Graham Wylie, also founder of the £10bn FTSE 100 group Sage.
Good technology invites inward investment.
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