Labour’s gamble with Royal Mail may go horribly wrong | Nils Pratley
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Past talk of renationalisation gives way to approval of takeover in which price of first-class stamp could be set from Prague. Two general elections ago, Labour was promising to renationalise Royal Mail. Now, in office, it is happy to see the ancient institution fall to a leveraged takeover bid from a private equity-style company that will have the power to set the price of a first-class stamp from Prague.
![[Nils Pratley]](https://i.guim.co.uk/img/uploads/2017/10/09/Nils-Pratley,-R.png?width=180&dpr=1&s=none&crop=none)
The decision is an outright gamble. Many European countries have privatised their postal services but there is a good reason why none have allowed ownership to pass overseas. Even in a digital age, businesses such as Royal Mail provide critical national infrastructure that has a social value on top.
Naturally, the boasts from government on day one were about the supposed robustness of the undertakings agreed with EP UK Bidco, the takeover vehicle owned by Daniel Křetínský, the multibillionaire Czech tycoon, and his 44% co-investors, J&T. And it is true there were welcome tweaks to the original version that was announced when the board of International Distribution Services (IDS), Royal Mail’s parent, rolled over in May and surrendered for 370p a share, or £3.6bn. The UK government will get a golden share in Royal Mail, for starters, to give it a permanent say in the governance set-up and tax location.
Yet other elements in the undertakings are laughably light. One restriction on dividends to EP merely requires Royal Mail to equal the score for on-time delivery of letters that it achieved last year – a period, note, for which it has just copped a £10.5m fine from the regulator for substandard performance.
