Demarche for Czech Sphinx as the political silence is finally broken, says ALEX BRUMMER

At last, the political silence has been broken. Labour’s manifesto promises that the proposed £3.6billion takeover of the Royal Mail by ‘Czech Sphinx’ Daniel Kretinsky and lesser-known business associates will be properly scrutinised.

Someone has been listening to Dave Ward, general secretary of the Communications Workers Union (CWU), in an interview and as a guest City columnist on these pages.

Unlike the flaccid board of the Royal Mail, which surrendered at the first smell of cordite, the union recognised that it would be a huge mistake for a utility, part of the national furniture since the 16th century, to fall under overseas ownership.

Successive chief executives have blamed the unions for obstruction on modernisation and for weakening the company. In representing its members, the CWU has not been easy to deal with.

The board, headed by BA exile Keith Williams, should never have thrown up its hands in horror and accepted assurances from its biggest shareholder Kretinsky.

Its job was to defend a malfunctioning but great British institution, and prevent it falling under the spell of debt-fuelled overseas owners with controversial connections. 

The water industry shows that such mixed marriages, whatever the pledges made about investment, end up in the sewage.

At the heart of the Royal Mail is the universal service obligation. Amid falling volumes of snail mail, down from 20bn to 7bn letters a year, a new model was needed.

Ofcom and the company’s German chief executive Martin Seidenberg have come up with ways to future-proof the service.

Instead, the board is selling from under their feet. Labour is now offering to come up with a new business and governance model which gives workers and customers a greater say.

Preferably, this will be done in the context of a public listed company rather than through some half-baked public ownership proposal.

The possibility of Government intervention ought to stop the takeover timetable in its tracks. Kretinsky should refocus his attentions on the Euro 2024 footie.

Slim chance

BT was the growth company which outlived ownership by the General Post Office. But, like its step-sibling at the Royal Mail, it is under siege from overseas investors.

Latest to join an already lumpy share register is Mexican billionaire Carlos Slim, who heads a £40billion Latin American telecoms colossus.

He joins telecoms titans Patrick Drahi, with a 24.5 per cent stake and a debt problem, and Deutsche Telecom, with 12.5 per cent. It is carrying a £3.5billion paper loss.

The arrival of Slim has blindsided BT. Chairman Adam Crozier should be reaching out to understand his intentions.

Slim presumably knows that seeking full control would be opposed. Telecoms networks are part of the nation’s security. 

BT has been a serial underperformer. There are two poison pills: a stubborn pension fund deficit and an obligation for an expensive fibre-to-door broadband network.

Under the newish leadership of Allison Kirkby, group finances are healthier.

The shares have climbed 25 per cent since Kirkby took the helm, wielding the axe by getting rid of troublesome global services and easing back on capital expenditure.

Nevertheless, the shares are way below pre-pandemic levels and Slim recognises an upside.

Labour’s intervention at the Royal Mail deal suggests a tilt at BT, from any or all of the protagonists, will get short shrift.

Ukraine gambit

After months of wrangling, G7 advanced countries in Puglia, Italy, have come up with a way of funnelling cash to Ukraine.

They have agreed to leverage the accumulating interest on some £235billion of frozen assets to fill a £40billion funding gap.

Undecided is which banks will cough up the loans and whether or not they will attract some kind of sovereign guarantee.

The fear has been that confiscating Russian assets could cast a pall over China, Japan and others holding Western currencies in their reserves.