Why are private equity firms getting such criticism from MPs and the unions?
When private equity firms concentrated on small or medium-sized companies, nobody complained. They often bought poorly-performing manufacturing companies, or tired chains of shops on the high street. If they cut jobs to save the business, everyone understood. Now they are taking over household names such as Birds Eye and Boots, the unions have got jittery, accusing them of asset-stripping and profiteering. MPs have realised that private equity firms have been benefiting from lucrative tax loopholes. The combination of job cuts, high profits and low tax has been a potent one in the run-up to Labour’s deputy leadership contest.
