Taxpayer will be at risk if the Royal Mail deal goes horribly wrong, says ALEX BRUMMER

Among the more bizarre aspects of the deal carved out by Czech billionaire Daniel Kretinsky with the Government and Royal Mail is the use of a ‘golden share’.

Such shares protect strategic assets from foreign marauders. Among FTSE 100 companies, Rolls-Royce and BAE both enjoyed this protection.

It has been argued that golden shares depress the market value of assets because they make firms bid-proof and complacent. 

Anyone plugged into the leadership of ‘Turbo’ Tufan Erginbilgic at Rolls-Royce knows that is not the case. 

His transformation has delivered a doubling of the shares over the last year.

Business Secretary Jonathan Reynolds’ deployment of the golden share at Royal Mail amounts to a gimmick designed to get a poor deal for Britain, citizens and shareholders over the line. 

Instead of the golden share being used to protect a vital strategic asset from overseas plunder, it is being used to catapult Kretinsky into the driving seat.

A new golden share will be created which requires the Czech tycoon to keep the Royal Mail headquarters in Britain and to pay its taxes here. HQs are the first thing to go in takeovers. 

There are questions as to how robust such a requirement proves.

The HQ of Britain’s tech champion Arm remains in Cambridge. But command and control rested with its biggest shareholder Softbank in Tokyo. 

A UK revenue system, which favours debt over equity, will allow Kretinsky and his team to offset a big interest rate obligation, on a highly leveraged deal, against tax.

Even more dispiriting, should the sale of Royal Mail go horribly wrong, is that the taxpayer could be exposed. The golden share should be returned to sender.

Housing snafu

Fixing the foundations has involved Labour sorting out unfinished business left by previous administrations.

The latest settlement to emerge from the embers of the past is military housing. In 1996 it was decided that it might be a great idea to sell the squaddies’ estate, amounting to 55,000 houses, to a private equity consortium Annington Property, headed by Guy Hands. 

The maintenance contract went to another party. As with so many public-to-private deals, it hasn’t been a marriage made in heaven.

A succession of disputes emerged over the deteriorating quality of the ‘Annington’ portfolio with Britain’s diminished fighting forces often living in sub-standard housing. 

The Ministry of Defence sought to take back control of the estate and the whole matter ended up in court.

Under a truce just reached, the MoD is to pay Annington and its investors a whopping £6bn for the surrender of its 999-year leases on 36,000 housing units and an end to all legal actions. 

Money which would better have been spent on troops and weaponry. The lesson? Don’t tangle with private equity barons.

Last orders

Diageo has not had the best of times since Texan Debra Crew took the helm. A sales and stock-taking blunder in Latin America was a big blow. 

But Crew will never be forgiven if pubs in the British Isles were to run dry of Guinness over Christmas. Demand for the stout is soaring. Wetherspoons boss Tim Martin is threatening Diageo with a ‘stern word’.

I suspect Crew, a former platoon leader in the US’s Bosnia campaign, won’t be quaking in her army boots.