Royal Mail chairman Keith Williams is in the firing line, says ALEX BRUMMER
Government is not all about grand gestures such as bulldozing planning laws and a National Wealth Fund to power up Britain’s investment in green technologies.
Labour’s inheritance includes the debt crisis at Thames Water, unfinished work in converting Port Talbot from coking coal blast furnaces to electric arc and a jobs challenge from engineering trailblazer James Dyson.
All are fixable, but require brave decisions. The chairman of Thames Water, Adrian Montague, believes the water giant with 16m customers in London could become investable again providing regulator Ofwat allows it to set generous price rises – 40 per cent to 60 per cent has been mentioned.
Labour can allow Thames to drift into ‘special administration’ in the manner of electrical utility Bulb at cost to the exchequer.
Off the rails: In his role as chairman of IDS owner of Royal Mail, Keith Williams (pictured) has just ended the postal service's two century old relationship with rail freight
Or it could allow an inflation-busting price rise which, justifiably, would bring howls of despair from customers.
Dilemmas can be forestalled with courageous decision-making. Labour has demonstrated it can be bold.
National security adviser Tim Barrow has been axed as Britain��s next ambassador to Washington because the Government wants a more heavyweight political figure.
Next for the heave-ho should be Keith Williams, chairman of Great British Railways. As chairman of International Distribution Services, owner of Royal Mail, he has just ended the postal service’s two-century-old relationship with rail freight.
From October 10, Royal Mail is to sever relations with DB Cargo UK – a blow to the sector, making a nonsense of a target to boost freight services 75 per cent by 2050.
Williams is betraying the railways.
He also has caved in to the £3.6billion bid for the Royal Mail by the ‘Czech sphinx’ Daniel Kretinsky.
Business Secretary Jonathan Reynolds has been quiet on the Royal Mail takeover in spite of a manifesto commitment to scrutinise it robustly.
He now has good reason to intervene, demand the head of Williams and to block the Royal Mail sale.
Thames Water provides all the evidence Reynolds needs that highly leveraged, overseas takeovers of public utilities are an unmitigated disaster.
Billions of pounds flows overseas – some to the tax haven of the Cayman Islands – instead of being invested in sewage treatment.
IDS is critical to UK public services. Plans to deal with falling postal volumes by more expensive first-class premium service and investment in parcels delivery offer a way forward.
Its European logistics arm GLS is a fast-growing asset generating cash. And there is terrific value to be extracted from the Royal Mail’s rich property portfolio. Development should be easier now that Labour is to bulldoze planning restrictions.
Reynolds needs to act fast before Kretinsky, with 27.5 per cent of the stock, carries away the Royal Mail spoils. Replacing Williams with someone willing to stand up to the marauders should be a priority.
Rousing housing
After the high-flown rhetoric as Chancellor Rachel Reeves bravely reinstated mandatory targets for housebuilding, there is a touch of reality from FTSE 100 developer Barratt.
The addition of planning officers, using brownfield and greyfield sites and spilling onto the green belt will help.
The reality is that elevated mortgage rates, shortages of building supplies and qualified workers mean pushing the boulder uphill is hard.
Barratt reports a 19 per cent reduction in completions in 2024 and warns of a further decline of as much as 7 per cent in the year to June 2025.
Troubled builder Crest Nicholson is preparing to recommend a £720million offer from rival Bellway.
The fewer the number of house builders, the weaker the regional opportunities and the lesser the competition.
An aspiration to drive growth, by targeting the building of 1.5m homes by 2029-30, is worthy – but impractical.
Tyne swoop
Switzerland’s Pictet Alternative Advisors is financing a management buyout of Gateshead-based Technology Services Group, which provides Microsoft-approved software, cloud computing and AI services to Britain’s small firms.
Stepping back from the fray is software pioneer Sir Graham Wylie, also founder of £10billion FTSE 100 group Sage.
Good tech invites inward investment.
DIY INVESTING PLATFORMS
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
Compare the best investing account for you
