The Government will probe a Czech billionaire’s planned takeover of the Royal Mail.
Royal Mail owner International Distribution Services accepted a £3.5billion takeover swoop from Daniel Kretinsky, meaning the postal company is set to fall into foreign hands for the first time since it was set up by Henry VIII in 1516.
The Cabinet Office has now decided to scrutinise the deal under the National Security and Investment (NSI) Act.
A discrete investigation will assess whether there is any harm to the UK’s economic infrastructure.
The government will only publicly acknowledge the inquiry if it concludes the deal should be blocked or given certain conditions.
Business groups and unions welcomed the latest development as a sign that Labour is taking concerns seriously.
Royal Mail owner International Distribution Services accepted a £3.5billion takeover swoop from Daniel Kretinsky (pictured) but it will now be probed
Under current owners, Royal Mail has already urged regulators to let it slash second-class service in half from six-day deliveries to every other weekday (file picture)
Labour insisted it would ‘robustly scrutinise’ the takeover and give workers a ‘stronger voice’ in its election manifesto.
Communication Workers Union general secretary Dave Ward said that current assurances from the company and Mr Kretinsky were ‘not strong enough to protect workers, customers and the crucial infrastructure that Royal Mail provides for our communities and the economy.’
The union wants a new ownership model that would give workers a stake, meaning ‘ a greater say over the future direction of the company.’ There are also fears Kretinsky – known as the ‘Czech Sphinx – will slash the frequency of second-class deliveries.
Groups representing thousands of small companies are terrified the postal service will be given a ’21st century Beeching Axe’ – a reference to the swathe of railway route closures made in the 1960s.
‘Whoever owns Royal Mail, we’re all looking for lock-tight, long-term undertakings on affordability and reliability. Above all communities need a postal service that performs, serving the needs of small businesses and consumers,’ Amanda Fergusson, chief executive of the UK’s Greeting Card Association said.
The GCA was among the groups – including the British Independent Retailers Association (BIRA), the Booksellers Association and the National Federation of SubPostmasters – who this week implored Business Secretary Jonathan Reynolds to enforce protections.
They worry second class deliveries could be ‘chopped back to just three days a week’ and that there may be ‘runaway prices’ for first class post.
As well as small firms, this would be a headache for elderly people who rely on the service.
Under current owners, Royal Mail has already urged regulators to let it slash second-class service in half from six-day deliveries to every other weekday.
Its boss said this would give it a ‘fighting chance’ to boost standards and help it save £300million. But the proposals also result in almost 1,000 job losses.
Labour insisted it would ‘robustly scrutinise’ the takeover and give workers a ‘stronger voice’ in its election manifesto (file picture)
At the moment, letters must be delivered six days per week, Monday to Saturday, and parcels Monday to Friday (file picture)
In April the cost of a first class standard letter rose 8 per cent to £1.35 while a second-class stamp now costs 85p – the same price of a first class stamp in early 2022.
Watchdog Ofcom is currently assessing how the troubled postal service’s obligations can be reformed – which could see it allowed to offer a less frequent service.
At the moment, letters must be delivered six days per week, Monday to Saturday, and parcels Monday to Friday.
Ofcom has said there will be an update on the reforms later this year.
Kretinsky, a major shareholder in West Ham United and Sainsbury’s, met with minister Reynolds last Tuesday – for the first time since the general election. They reportedly had a ‘cordial and constructive’ conversation.
The buyer has already insisted it will protect ‘the continuance of six-day delivery for First Class letters’, current parent company International Distributions Services (IDS) said earlier this year.
But this stoked concerns about what could happen to second-class deliveries.
