The Trump tariff war is a strong reminder of how critical it is to UK plc to preserve command and control of our economy.
The blitz of trade actions from the White House obscured a regulatory filing which will have an impact on every household and every enterprise in the land.
International Distribution Services (IDS), owner of the Royal Mail, revealed that the last regulatory obstacle standing in the way of the Czech Sphinx Daniel Kretinsky’s £3.6billion takeover of Britain’s postal service has been cleared. The nodding dog IDS board indicates the deal will complete by April 30.
That would be a travesty. The postal service is a critical public good like Thames Water and the steel industry. Allowing it to fall into overseas hands is a strategic and economic error.
Hurdles still stand in the way. Ofcom is conducting a public consultation on proposed changes to the Universal Service Obligation (USO). Until that is completed, and the new pricing and delivery regime is known, minority investors cannot possibly determine whether the offer on the table is good value.
The Greeting Cards Association, representing a £1.5billion creative industry, objects to changes to the USO. It would stand little chance of making itself heard at the Royal Mail once the company is in opaque foreign hands. By now, someone in Whitehall should have joined up the dots. The consequences of uncaring, financially engineered foreign takeovers are proving an enormous problem for Labour.
Signing off: The postal service is a critical public good like Thames Water and the steel industry
Heathrow’s reputation as Europe’s hub airport was placed in jeopardy last month because of the sub-station fire which brought air traffic to a halt.
If Heathrow were a listed firm, not owned by random wealth funds, heads would have rolled.
At Thames Water, the company and Government are relying on the kindness of strangers, in the shape of the original ‘Barbarians at the Gate’ KKR, to come to its rescue with a £3billion or so equity injection.
That represents another spin of the roundabout of endless financial engineering which has led to sewage spewing into the nation’s waterways. The Tories’ desperate sale of British Steel at Scunthorpe to China’s Jingye also has been an enormous error.
Among the reasons for British Steel’s difficulties is the wholesale dumping of steel made in China, with a big carbon footprint, at knock-down prices.
There will be even more because of the Trump trade war. Yet Jingye is seeking a taxpayer subsidy for swapping blast furnaces for greener electric arc ones.
It is difficult to see how Kretinsky is going to make the Royal Mail a profitable proposition without defenestrating the group. Shareholders will receive cash for their holdings. This is only possible because it is taking on £3billion of new debt from foreign banks.
We know from Asda how badly such highly leveraged deals for consumer-facing companies can go. A combination of unprepared management and an interest rate burden has seen Asda’s share of the grocery market in the UK cannibalised.
Kretinsky’s EP group bought off the unions and Government with pledges about no job losses and pay deals. Once the sale of IDS goes unconditional, the ability of regulators to police the accords will be limited. Enforcement will be even harder now that Donald Trump has upended global markets and increased the chances of a recession.
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .