Pipeline to Royal Mail: Czech Sphinx’s Russian gas deal is cause for concern: ALEX BRUMMER

Europe has done a great job of weaning itself off Russian gas supplies since the start of the war in Ukraine.

The Kremlin’s share of the gas market fell from 35 percent to 8 percent as users switched suppliers to Norway and liquefied natural gas (LNG) producers in Qatar and the US.

There was one big leak, which was the transit of gas through Ukraine, mainly to Slovakia and Austria.

That contract ended on January 1 when Ukraine’s Naftogaz refused to renew its latest five-year transit contract with Russia’s Gazprom.

It is a mystery why, given the extensive Western sanctions against Russia, this treaty remained in force.

The policy was seen as an economic boon for Kiev, which stands to lose around £800m in transit fees due to the disruption. Less is said about other users.

They include SPP Infrastructure, the group that controls the Eustream pipeline that pumps gas to Slovakia.

A minority owner of 49 percent in the plan is EPH, part of Czech sphinx Daniel Kretinski’s vast empire, which includes stakes in West Ham FC and Sainsbury’s.

Putin’s gas enriched Kretinsky and his partners and is one of the reasons Kretinsky was able to accumulate enough wealth to enable him to make a £3.6bn bid for International Distribution Services, the owner of Royal Mail.

The Slovak-Austrian gas pipeline could operate with an EU exemption.

This does not change the fact that Russia’s gruesome war against Ukraine has intensified with the use of drones and advanced missiles to attack civilian and power generation targets.

The attack cost lives in the war-torn country.

Kretinsky and his fellow infrastructure investors continued to receive dividends from the pipeline, so it is remarkable that the proposed deal for Royal Mail passed scrutiny under the National Security and Investment Act under such circumstances.

The UK has been at the center of efforts to shut down Russia’s economy, driving UK-based oligarchs out of the country, seizing billions of pounds of financial assets, suspending Russian stock listings in London and more.

Even if Kiev were the intended beneficiary of keeping the trans-Ukrainian line open, it would be difficult to justify the profits made from the Russian connection.

Business Secretary Jonathan Reynolds and the Royal Mail unions may consider Kretinski a legitimate business person. But the families of the dead, injured and dispossessed in Ukraine may take a different view. So should the British government.

Export pain

The economic outlook for Rachel Reeves is not getting any better.

Growth could pick up in 2025 thanks to money flowing into the public sector after its budget.

But wealth creation through the private sector has been neglected. And with the Government assuming a large part of the state’s borrowing capacity, there is a risk that private sector investment will be squeezed out.

The manufacturing PMI tells a continued dismal story, with activity shrinking at the fastest pace in 11 months.

The UK tends to mock the weaknesses of the Eurozone economies, but this ignores the fact that Europe is Britain’s biggest trading partner.

This contributed to the biggest drop in exports and new orders in the last ten months.

As usual, Britain can count on its dominant service sector and the City to bail us out. There is no better time for the Chancellor to boost confidence by helping to broker a new ‘equivalence’ deal for the London derivatives market.

More critically, the abolition of share trading could be a totem to revive sentiment on Britain’s battered stock markets.

Rocket science

Britain punches well above its weight in science, as the UK’s record in Nobel Prizes and tech start-ups shows.

It is deeply worrying that the FT’s analysis reveals a decline in key science subjects over the past five years. Undergraduate studies in chemistry fell by 25 percent, and those in biosciences by 15 percent.

A £2.3 billion increase in education spending over two years is proposed, with cash from VAT on independent education. It would be best applied to revive the appetite for laboratory and technical training.

Ministers need to close the gap in science if the cutting edge of research is not to be dulled.