THE Confederation of British Industry (CBI) today stepped in to defend the role of private equity in British business.
The employer's organisation rejected claims that the industry uses tax breaks and acted as "ruthless asset strippers" merely to bump up profits, saying they should be praised for regenerating companies with "an effective business model".
It insis
ted that private equity, contrary to popular belief, created jobs and warned that any move to change the tax breaks currently enjoyed by private equity firms could hit all businesses, although it admitted the issue was a legitimate "area for debate".
In a separate report today, the private equity trade body, the BVCA, said pension funds were earning good returns from investing in private equity, claiming private equity funds boasted ten-year returns of 18.7 per cent, compared with 7.9 per cent for the FTSE All-Share Index.
The CBI spoke out following growing criticism from unions about jobs being axed and working conditions worsened when firms were taken over by private equity companies. Unions including the GMB have launched a strong campaign to highlight cuts at firms, including the AA motoring organisation and Bird's Eye.
Richard Lambert, director general of the CBI, said: "Private equity
generates real benefits for the UK in terms of jobs, leaner and more efficient businesses and wealth creation
. It should be cherished rather than clobbered."
The full article contains 236 words and appears in Edinburgh Evening News newspaper.
