Private equity veteran to run London - for £1

Ex-AA boss Tim Parker has signed up as Boris's number two. But he's not a wholly popular choice...

Last Updated: 31 Aug 2010

Newly-elected London mayor Boris Johnson has managed to persuade Tim Parker, one of private equity’s favourite managers, to sign up as his right hand man. Parker has been appointed as First Deputy Mayor, chief exec of the Greater London Assembly Group and chairman of Transport for London. In other words, he’s suddenly become the second (possibly the first) most powerful man in London. And the good news for taxpayers: he’s so filthy rich already that he’s agreed to do it for £1…

Parker made his reputation – not to mention huge piles of cash – by running companies on behalf of several big buyout firms, including the AA and Kwik-Fit. And he appears to have been very good at it, judging by the rewards he’s accumulated – he has a reputation as a ruthless cost-cutter, which you’d think would be a good attribute for someone running a big public budget.

However, cost-cutting in big companies tends to mean sacking people – which is why he’s earned the nickname ‘the Prince of Darkness’ from his enemies along the way. It was the AA’s spat with the GMB trade union that really kicked off the row about private equity last summer, and the union still hasn’t forgiven him for it. ‘This is a scary moment for London's commuters,’ GMB boss Paul Kenny said today. ‘Tim Parker is one of the multi-millionaire elite private equity buccaneers who asset-stripped the AA by cutting jobs and cutting services and raising prices to customers.’

And it sounds like his chairmanship of TfL might be a tough gig too. RMT chief Bob Crow (the man with whom Boris wants to negotiate a no-strike deal), said today: ‘The world's finest metro system does not need an asset-stripper or a Prince of Darkness, but it does need its modernisation programme put back on track if it is to be ready for the 2012 Olympics’. We reckon their first meeting could be a bit tasty…

On the other hand, the beleaguered private equity industry will be delighted. After a tumultuous year, the industry’s top dogs will be thrilled to see one of their own ascend to this lofty perch. Not least because he’ll now be an influential voice within the Conservative Party – which has to be a good thing for the industry if they win the next election.

Perhaps this is a glimpse of the future under the Tories? Come 2010, we could have Damon Buffini running the NHS, Ronnie Cohen at the DTI (or whatever it's called that week), Philip Yea taking over Network Rail, and Jon Moulton in charge of the defence budget...

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