Labour to ‘call in’ £3.6bn Royal Mail takeover

Labour will ‘call in’ the £3.6bn takeover of Royal Mail by a billionaire dubbed the Czech Sphinx, the Business Secretary said yesterday.

Jonathan Reynolds said he has no objection in principle to the postal service having an overseas owner but added that the deal would be properly scrutinised. And he said he was due to hold talks with wouldbe buyer Daniel Kretinsky this week.

The Czech tycoon has agreed to buy parent company International Distribution Services (IDS) in a deal which will see Royal Mail fall into foreign hands for the first time since it was founded by Henry VIII in 1516.

Kretinsky has offered a series of promises on jobs and the Universal Service Obligation (USO) – to deliver post across the UK six days a week at a single price – to win over the board.

However, many remain concerned over the implications for Royal Mail’s future especially since the promises are limited to five years at most.

The deal also remains subject to national security scrutiny by the Government – a process that Kretinsky, the company’s biggest shareholder, has already undergone when he built up his stake.

Asked about what the new Labour government planned to do about the deal,

Reynolds said: ‘It would be reasonable to expect it to be called in. I myself am speaking to Kretinsky later in the week. I know the union have some talks scheduled.

‘Obviously fundamental to this is what is the business plan, what does that mean for the UK’s core national interest in Royal Mail, particularly given how the USO operates, and how can we have confidence in the guarantees put forward in that business plan that we can rely on.

‘These are all reasonable topics of conversation we will have.’

Asked if he was against the idea of Royal Mail being foreign owned in principle, he said: ‘No.’ Kretinsky is due to meet the leader of the postal workers’ union for the first time today. He will hold talks with Dave Ward, general secretary of the Communication Workers Union, who has called for staff to be given a stake in the company.

Kretinsky is understood to have rejected these proposals, setting the scene for a frosty meeting at Royal Mail’s Mount Pleasant sorting facility in London.

Labour was elected on a manifesto that pledged to ‘ensure that any proposed takeover is robustly scrutinised’.

The manifesto added: ‘Labour will also explore new business and governance models for Royal Mail so that workers and customers who rely on Royal Mail services can have a stronger voice in the governance and strategic direction of the company.’

DIY INVESTING PLATFORMS

AJ Bell

AJ Bell

Easy investing and ready-made portfolios

Hargreaves Lansdown

Hargreaves Lansdown

Free fund dealing and investment ideas

interactive investor

interactive investor

Flat-fee investing from £4.99 per month

eToro

eToro

Share investing: 30+ million community

Trading 212

Trading 212

Free share dealing and no account fee

Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.

Compare the best investing account for you