Labour vows to scrutinise Royal Mail bid placing £3.6bn deal unsure

Labour has vowed to ‘robustly scrutinise’ the Royal Mail takeover and give workers a ‘stronger voice’ in a pre-election pledge that throws the deal into doubt.

In its manifesto, Sir Keir Starmer’s party promised to look into the proposed £3.6billion sale of the 508-year-old postal service to a billionaire known as the ‘Czech Sphinx’.

Crucially, Labour said it would explore giving workers more of a say in how Royal Mail is run.

The pledge appeared to cede ground to unions demanding that posties gain part-ownership through a collective employee trust. Analysts said it could come too close to nationalisation for buyer Daniel Kretinsky and put him off.

Shares in parent company International Distribution Services dipped almost 2pc following the publication of Labour’s election manifesto yesterday.

Scrutiny: Billionaire investor Daniel Kretinsky (pictured), who is known as the Czech Sphinx, agreed a £3.6bn deal to but the Royal Mail

The price recovered to around 0.7 per cent, or 2.4p, down at 329.6p, which is well below the 370p offer price tabled by Kretinsky and accepted by the IDS board.

The gap suggests many do not expect the deal to go through.

‘It is the market’s way of saying it thinks there is even less of a chance that the takeover will complete,’ said Dan Coatsworth, an investment analyst at AJ Bell. 

‘Labour’s intention to let workers and customers have a stronger voice would give them nearly the same rights as a shareholder.’

He added: ‘Kretinsky might think that is a step too close to nationalisation.

‘Kretinsky no doubt wants to take Royal Mail out of the public spotlight so that it can be fixed without investors demanding constant updates.

‘But Labour drawing up a list of demands because Royal Mail is a vital part of UK infrastructure could effectively keep that spotlight shining bright.’

Kretinsky has promised to keep the Royal Mail name and brand and retain its UK headquarters and tax residency to keep it tied to Britain.

But the Communication Workers Union, which represents around 110,000 workers, wants posties to have a stake.

Under a collective employee trust, workers would have a say in how the business is run and a share in its profits. It would also reduce the risk of industrial action.

Writing in the Mail this week, CWU leader Dave Ward called for ‘a new ownership and governance model for Royal Mail’.

‘Our plan will build back trust from the public and businesses and win over tens of thousands of workers who have been demoralised by the leadership by giving them a major stake in their businesses,’ he said.

Business Secretary Kemi Badenoch was due to hold talks with Kretinsky this week. 

She previously sought commitments from the current management that Royal Mail’s universal service obligation would be protected.

The takeover could also be derailed under the National Security and Investment Act, but so far both Labour and the Tories have stopped short of threatening to block the deal.

Kretinsky has hinted that he would back management’s plans to reform the postal service, which include cutting second class post to three days a week.