A report by a committee of MPs has piled on the pressure to the embattled private equity industry, according to the TUC.
MPs on the House of Commons Treasury Select Committee published an interim report which stressed the need for greater transparency from the sector.
The report recommended an independent body be set up in the autumn to monitor compliance with a voluntary code for disclosure.
Brendan Barber, TUC general secretary, said: “Even this cautious interim report piles the pressure on private equity. It raises the same concerns that unions have posed. It clearly endorses the need for more openness and transparency.
“Most importantly of all it rings a very loud alarm bell about the potential instability caused by the growth of highly-leveraged buyouts. If this is cautious and interim, the final report could well be a humdinger.”
However, CBIÂ director-general Richard Lambert said private equity was a “substantial and valuable part of the UK economy”.
“Where big transactions are concerned it is appropriate that information about its investment activities is available to those with a valid interest such as investors, employees, suppliers and creditors,” he said.
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But Lambert warned against changes to the tax regime on these deals, saying it would damage the UK’s competitveness.
“Business activities of all kinds are financed by debt, and used by companies of all sizes, regardless of ownership, and in many countries. Changing the rules on tax deductibility of interest would be seriously damaging for all businesses, not just those owned by private equity.”
