Unions hit out over private equity

Dec 11 2007 by Peter McCusker, The Journal

UNIONS have criticised the Government over its response to a report by a Commons committee on the private equity industry, complaining that ministers had failed to address concerns raised by MPs.

The Government said it believed changes it has announced on the capital gains tax regime and to domicile and residence rules would create a more sustainable and fair tax system.

The report said there was no reason to suppose that the original reasons for introducing a so-called memorandum of understanding in 1987, which covered the private equity tax regime, was not being followed. The Government was responding to an interim report by the all-party Treasury select committee, which backed more openness and public accountability for the private equity industry.

TUC general secretary Brendan Barber said: “Today’s response has failed to address many of the concerns raised by the Treasury Committee on the treatment of private equity.

“The Government’s explanation of the ‘memo of understanding’ ... does nothing to convince the TUC that this tax treatment is justified.

“This is a prime example of how the super-rich avoid paying their fair share of tax, and the rest of us have to make up the difference.”