Paul Walsh back in the running for CBI after Tory win – Inside Track

At 9.55pm last Thursday, Lord Ashcroft confidently predicted at a party hosted by the former Conservative treasurer Michael Spencer that David Cameron was facing electoral annihilation.

 

How things can change in a matter of minutes. Guests at Scott’s in Mayfair rejoiced as the exit polls showed the Prime Minister just ten seats from an overall majority.

 

Ashcroft, according to onlookers, was ashen-faced, departing soon afterwards. But for every ounce of discomfort he felt, Paul Walsh, the former Diageo chief executive, must have made up for it with sheer relief.

 

Walsh has found himself at the centre of an unseemly tussle over his political affiliation, even as Britain’s biggest business lobbying group was poised to name him as its next president.

 

Signing a pro-Tory letter at the start of the General Election campaign was, to say the least, short on consideration for the CBI’s studied efforts at political neutrality.

 

A hung parliament or Labour victory would have made it impossible for the CBI to ratify his appointment: while Walsh’s political views may not have been entirely concealed in the past, the timing of his signature was intensely provocative.

 

The Tories’ outright victory means that the possibility of him replacing Sir Mike Rake has not entirely disappeared.

 

A quiet word with Chuka Umunna, the Shadow Business Secretary and frontrunner for the Labour leadership, may be enough to calm residual tensions for now. Yet after the CBI’s mis-steps during the Scottish independence campaign, it risks exposing itself to significant risk in any future debate in which the group sides with Conservative-leaning ideology.

 

That point was thrown sharply into focus just three days after David Cameron returned to Downing Street, with proposals to reform strike laws yielding inevitable protests from trade unions.

 

CBI presidents serve for just two years, meaning that Walsh’s politics won’t be thrust back into the electoral limelight again. Nonetheless, it might be wise for the CBI to scour for an alternative candidate.

 

I hear Lord Ashcroft might be available.

 

Hong Kong conglomerate buys UK telco with Brazilian, Canadian and Singaporean capital: for a lesson in smart deal-financing, look no further than Hutchison Whampoa’s cosmopolitan approach to funding its takeover of O2.

 

Hutchison, which intends to merge O2 with Three, its existing British network, is stumping up less than £500m of its own cash for a transaction valued at well over £9bn.

 

Li Ka-shing, the octogenarian Hutchison founder, is well-practised at making his money – and his banks – work hard for him.

 

But will this merger happen at all?

 

Well-placed telecoms industry sources suggest that Margrethe Vestager, Denmark’s formidable EU competition commissioner, may have other ideas.

 

Already a visible opponent of intra-market consolidation since taking up her post, Vestager is expected to see off efforts from UK regulators to act as arbiter of the O2-Three deal.

 

That would augur badly for their hopes of seeing it through unchecked.

 

True, the new company could be voluntarily shrunk by offering pricing or asset-sale remedies to the EU.

 

Don’t bet on that being enough to satisfy the Great Dane of Brussels.

 

Banker reliant on a steady pipeline of flotations were buoyed by the General Election result – although two of the biggest potential deals involving Center Parcs and New Look may yet go to private buyers.

 

McCarthy & Stone, the retirement homebuilder, is also in the queue. I understand its shareholders have hired Goldman Sachs and Deutsche Bank to list it towards the end of the year.

 

Its return to the stock market, as it casts off the shadow of HBOS, will be nothing if not symbolic.