There is much to fear from the takeover of Royal Mail by a private financier. It is fair to say that over the longer term, everything about the 500-year-old institution could now be at risk.
The string of commitments made by the Czech billionaire Daniel Křetínský in his bid for the postal service’s parent group, International Distribution Services (IDS) – accepted by the board on Wednesday – will be vulnerable to renegotiation after just a few years.
A relationship with 28 million households and more than 5m businesses is at risk. A central question is whether customers will still be able to afford to post a letter. Another is whether those on the periphery of the new owner’s vision – rural dwellers and elderly people – could be excluded to improve the company’s profitability.
Křetínský is offering to take IDS private for £3.57bn, absorbing about £1.7bn of existing debt in the process. He says he will pay for the business with £1.2bn in cash and an extra £2.3bn in borrowed funds, meaning Royal Mail will be burdened with even more debt should the deal go through.
Indebted businesses that are considered strategic by the UK government, such as Thames Water, can use those borrowings as leverage over ministers and regulators.
No minister wants to consider renationalisation when the purchase includes the cost of a large debt pile. Debt is like a poison pill deterring ministers from acting decisively.
Then there are the commitments to preserve Royal Mail as an identifiable entity. Křetínský promises the branding is sacred for five years, as are its UK headquarters and tax residency.
A separate promise to maintain base salaries and benefits for staff will last for only two years, while a pledge not to break up the company is for three years.
In the context of an organisation that traces its roots back to Henry VIII, these are micro-commitments.
No doubt ministers will be told that making further demands on Křetínský will scare him off and Royal Mail, left to fend for itself, will not be viable.
Jonathan Reynolds, the shadow business secretary, who met Křetínský at the recent World Economic Forum in Davos, has turned his back on union calls for renationalisation.
Reynolds said the Czech’s assurances that Royal Mail would “retain its British identity and safeguard its workforce” were welcome, indicating he is minded to wave through the takeover should Labour win the election.
Look over the Channel to France, and the government funds a universal service to bind society with an institution that, while not beyond criticism, provides a sense of collective welfare, making sure everyone can communicate using paper for official and friendly purposes. Likewise, the US retains ownership and management of the US Postal Service.
There is no doubt Křetínský’s bid for IDS is audacious. It means taking an important UK public company with a long history and strong connections to the monarch and turning it into another cog in a sprawling private empire.
The next government should take a tough stance. Privatising the business and listing it on the stock exchange, where companies are forced to be transparent about much of their activities, is one thing. Selling it to a private financier whose operations are largely overseas is quite another.
