Czech billionaire set to take over Royal Mail shows ‘nightmare of privatisation’

'If you look at the Tory record over decades on privatising our public services and utilities, it has been a scandal'

Royal Mail building

The Royal Mail is poised to be taken over by a Czech billionaire after the parent company of the British postal service said it was “minded to recommend” his £3.5bn takeover bid. 

Nicknamed the ‘Czech Sphinx’, billionaire Daniel Křetínský could be the next owner of Royal Mail after his increased offer was considered by the International Distributions Services (IDS) on Wednesday. His EP Group already holds a 27.5% share of the company but the energy and media mogul is hoping to take full control. 

Speaking on the Peston show, president of the Trades Union Congress Matt Wrack said the takeover bid symbolised the “nightmare of privatisation” under the Conservative government.  

Privatisation of the Royal Mail started in 2013 when a majority of its shares were sold off, despite 96% of Royal Mail staff opposing the sale. This followed the Lib Dem-Conservative coalition government passing the Postal Services Act of 2011, which allowed for 90% of Royal Mail to be privatised. The last public shares were sold in 2015. 

Commenting on the latest takeover bid, Wrack said: “I think it shows the nightmare of privatisation and where that has ended up. If you look at the whole Tory record over decades on privatising our public services and utilities, it has been a scandal, a disaster, for the consumer and user of those services and for the workers within those industries.” 

The General Secretary of the Fire Brigade Union added: “The conservative government should feel shame at how they’ve treated those workers and those public services.”

Anti-privatisation campaign group We Own It has said the takeover by the Czech billionaire would mean “another national service, relied on by millions, in the hands of foreign investors”. It added, “Britain, and its posties, deserves better.” 

Research has found that public ownership of Royal Mail would save £171m a year, while re-nationalising the postal service is supported by the majority of the British public. The current owner has also faced complaints that Royal Mail’s performance in recent years has deteriorated. 

The Communication Workers Union (CWU) warned the “future of postal services in the UK is again under threat” and that “it cannot be right that a key part of national infrastructure is allowed to be owned by individuals or companies who have no vision for the future”, calling for the company that takes over to commit to working with the union.

In a piece for the Tribune, Dave Ward the General Secretary of the CWU said a takeover by a private company was not in the interest of the UK public or businesses, and called for a new ownership model to be established, based on people not profit.  

Křetínský now has until 29 May to make a firm offer.

(Image credit: Flickr)

Hannah Davenport is news reporter at Left Foot Forward

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