Unite, the union, argue that private equity should be much more heavily regulated or controlled by central government.
Clearly, the fact that these companies are ‘secretive’ offends the folks at Unite, who were so keen on lambasting British Airways for allegations about the privacy of its staff. We should do well to remember that privacy and secrecy will be the first things to be lost if the socialists have their way, and I am not only referring to the secrecy of the deals at private equity groups.
Private equity, like that other demonized aspect of international finance, short-selling, is very effective at streamlining companies and keeping them efficient. However, because transactions in private equity or short-selling are complex and some people can make large sums of money doing them well, the same tabloids and unions that don’t understand them kick up a big fuss.
However, there is definitely one aspect that I do think needs reform – the profit-making ability created for private equity firms by the complexity of the tax code, and it’s emphasis on debt. Therefore, I propose a deal to those of a socialist persuasion – help us to campaign for a simplified tax regime, with a £12,000 personal allowance and flat rate of income tax at 22% (or even better, no income tax at all), and we will ensure that private equity firms pay their “fair share”.
