the times | Monday January 3 2022 33Business
launching pad for more deals. Tesco
under Leahy grew rapidly and inter-
nationally; what fascinates onlookers
now is whether he wants to repeat the
trick now.charlie nunn
Lloyds Banking Group has been run by
Charlie Nunn since August (Katherine
Griffiths writes). While the lender has
been dealing with the lasting impact of
the pandemic, the likeable former
management consultant has had a
largely smooth path, with the emer-
gency measures needed to cope with
the pandemic having been put in place
already by António Horta-Osório, his
predecessor, and with the economy on
the up.
This year could be trickier. Nunn will
deliver his strategic vision for Britain’sowned by Clayton, Dubilier & Rice. The
Issa brothers attempted to do just this
with Asda and EG Group, but unwound
the deal in the curious circumstance of
not being able to negotiate the same
terms with suppliers.
Former colleagues reason that Leahy
is not a man short of ambition or drive.
To make a return on the highly
leveraged deal, the chain’s chairman
will have to be confident that Morrisons
can be exited by its private equity owner
in five years or so at a higher premium,
either by taking it back to the public
markets or by finding another private
buyer.
While inflation might help grocers
and with the pandemic having proven
their resilience, many believe that there
might have to be something trans-
formative. Morrisons could even be aClayton, Dubilier & Rice’s £7.1 billion
takeover of Morrisons after a four-
month tussle with a consortium led by
Fortress Investment Group that went
down to the wire.
The question is: what will he do with
the supermarket? For now, the compe-
tition watchdog has put an initial
enforcement order in place, meaning
that although Clayton, Dubilier & Rice
owns the business, it cannot get its
hands on it just yet. As a result David
Potts, the chief executive, and Trevor
Strain, the chief operating officer —
both former colleagues of Leahy at
Tesco — are still running the show.
Provided that the competition
authority clears the deal, one obvious
route for the chairman is a merger of
Morrisons’ fuel business and MFG, a
900-forecourt petrol empire alreadyrequesting a seat on the board and
increasing his stake. Deutsche Tele-
kom, BT’s second largest shareholder, is
considering options for its 12.1 per cent
holding.sir terry leahy
The transfer of Morrisons into private
equity hands could be seen as a sign
that the Bradford-based supermarket
might start prioritising profits and may
become less of a competitive threat
(Ashley Armstrong writes). Speak to
any rival grocer and their answer is
along the lines of “maybe, if it wasn’t for
that chairman”.
“That chairman” is Sir Terry Leahy,
the former Tesco boss who is making
his return to the cut and thrust of
British grocery retailing after an 11-year
absence. Leahy, 65, spearheadedPatrick Drahi
Terry Leahy
biggest high street lender alongside its
full-year results in February. The first
question will be whether he follows the
well-established precedent of his pre-
decessor in setting out a three-year
plan. Horta-Osório, who ran Lloyds for
a decade, became a master of the form,
galvanising staff and investors to the
approach and using it to ram home a
message that each plan delivered.
Nunn apparently has yet to decide
whether to continue with the three-
year plan or to forge his own method.
He also has to decide what to say.
Nunn said alongside third-quarter
results in October that he saw oppor-
tunities “in all areas”. Some of these are
expected to be common ones, such as
trying to get more of Lloyds’ 25 million
customers to buy more products from
the bank and building on plans in
wealth management to stop customers
slipping away to competitors.
He may have more controversial
ideas, too, including expanding into
services for larger corporate clients and
investment banking. An absence of
those services and a focus on straight-
forward retail and business banking has
been seen as one of the bank’s strengths
since the financial crisis. A return to
riskier and more volatile areas may
divide Lloyds’ investors.
The atmosphere is more relaxed at
Lloyds’ headquarters under the new
boss, insiders say. That may not last if
his new plan does not land well in a few
weeks’ time.rachel reeves
Two years ago, Rachel Reeves was not
even on the radar of some of Boris
Johnson’s most senior political advisers
(Louisa Clarence-Smith writes). Now
she is one of the most-feared members
of the shadow front bench. The shadow
chancellor, 42, won plaudits for her skill
in picking apart Rishi Sunak’s last
budget when she was asked to stand in
at short notice because Sir Keir
Starmer, the Labour leader, had tested
positive for Covid-19.
Many businesses agreed when she
said that those hit by a “supply chain
crisis” would not recognise the rosey
picture of the economy painted by the
chancellor. “They will think that he is
living in a parallel universe,” she said.
The performance followed her
Labour Party conference speech in
September, where she sought to appeal
to businesses by pledging to scrap the
business rates hated by companies with
physical shops.
Reeves is considered to be one of the
cleverest MPs in front-line politics. Like
Sunak, she studied politics, philosophy
and economics at the University of
Oxford. However, unlike her Conserv-
ative rival, she turned down a job at
Goldman Sachs, the investment bank,
and joined the Bank of England’s
graduate programme, later working at
HBOS during the financial crisis. She
was elected in 2010 and was shadow
secretary of state for work and pensions
under Ed Miliband.
Her professional background makes
her well-placed to take on the govern-
ment over its economic policy if wide-
spread labour shortages persist this
year and cause a cost-of-living crisis.
She is likely to take the Conservatives to
task for their poor record on economic
growth and to pick apart policy
announcements that are not backed up
with any detailed plans.
Reeves has long been tipped as a
candidate to become the first woman to
lead Labour. For now, she is said to have
a good working relationship with
Starmer and is focused on transforming
Labour into a party that is less intro-
spective and on coming up with policies
to help her to become Britain’s first
female chancellor.up from the City to Westminster
Rachel Reeves
TOM STOCKILL FOR THE TIMES; IAIN MASTERTON/ALAMY; STEPHANIE SCHAERER/DAILY MAIL/REX/SHUTTERSTOCK; BENOIT TESSIER/REUTERS