Britain has been shockingly silent on Royal Mail’s sorry fate

Czech businessman Daniel Kretinsky
Royal Mail has said it is minded to accept Daniel Křetínský's £3.5bn takeover bid - David W Cerny

In paving the way for a takeover of Royal Mail by the Czech billionaire Daniel Křetínský, the company’s chairman Keith Williams said it was “regrettable that despite four years of asking, the Government has not seen fit to engage in reform of the universal service”.

Williams’s logic is that if ministers had relaxed the requirement to deliver to every address in the land six days a week, Royal Mail would have been able to “provide an economically sustainable service to the British public” – and presumably therefore avoid jumping into the arms of a private equity tycoon at the first opportunity.

There’s some merit in that argument but it risks being a cop-out and a distraction (perhaps deliberately) from other decisive factors at work.

What is surely more regrettable is that someone who arrived at Royal Mail six years ago with a reputation as a tough negotiator – he brought to an end a long-running union dispute while at British Airways – appears to have rolled over without much of a fight.

Still, he’s not the only one seemingly prepared to hand over one of this country’s most strategically important institutions with barely a whimper.

New Royal Mail chairman Keith Williams
Despite his reputation as a fierce negotiator, Royal Mail chairman Keith Williams appears content to roll over for Křetínský

The Government has shown little appetite to mount a defence. The Chancellor has talked in platitudes about how there are lessons to be learned from the debt crisis that has engulfed Thames Water at the same time as repeating the tired yet vague mantra that Britain must ensure it continues to attract foreign investment.

Beyond that, the Government has been shockingly silent on the future of an organisation founded by Henry VIII more than 500 years ago.

Meanwhile, Labour was so quick to rush out a press release in response to “reported developments” in Křetínský’s approach that the statement was in danger of looking like it had been coordinated with the roll-call of generously remunerated advisers assembled by the Royal Mail board.

Labour has pledged to “safeguard Royal Mail as a British institution”, but it is striking that a party expected to win the next general election by a landslide seemingly isn’t remotely opposed to it falling into overseas hands.

Instead, it is merely calling for a series of “safeguards” that we are led to believe will preserve a company that “is as British as it gets”, in the words of shadow business secretary Jonathan Reynolds.

And this is where the biggest red herring of all can be found in this short but sorry takeover saga.

A pledge from Křetínský to sign up to a series of “contractual undertakings” to protect employees’ rights, six-day deliveries for first class letters, and the Royal Mail brand, along with a commitment to keep it headquartered and tax resident in the UK, contains far too many holes for it to be anything like as reassuring as it is meant to be.

Without a promise to keep the parcels service GLS and the core Royal Mail letters business as part of the same operation, there is the obvious risk that the latter is jettisoned. That raises serious questions about the future of a business currently losing hundreds of millions of pounds a year.

Given a choice, customers would surely prefer to see the service protected over workers rights. Royal Mail has been run in the interests of the unions for far too long and part of the reason it is this sorry mess is that the Commercial Workers Union has repeatedly stood in the way of modernisation.

It is no coincidence that the biggest threat to Royal Mail comes from Amazon, a company that has always had a ruthless focus on the consumer.

But most concerning of all is the fact that none of these undertakings are legally binding as they stand. Having already gone back on a promise not to bid for Royal Mail, is Křetínský really someone whose word the board is willing to trust?

If Royal Mail directors are happy to wave through the takeover of what is a vital national asset, a full national security review is the minimum that is required. There is after all a reason why other countries have not allowed their postal services to fall into foreign ownership.