Richard Lambert, head of the CBI employers’ group, yesterday backed calls for greater disclosure and tax clarity in the affairs of private equity investors but warned against rushing into quick-fix solutions, Financial Times reports.
The CBI director-general, speaking at the TUC annual conference in Brighton, said that it was also right for unions to question non-domicile tax laws that allow the super-rich to pay virtually no tax.
Mr Lambert’s comments came as unions overwhelmingly backed a motion calling for tougher tax treatment and greater disclosure rules.
“Private equity makes the Cosa Nostra look like a model of openness and transparency by comparison,” says Jack Dromey, deputy general secretary of Unite, Britain’s biggest union. “They take our members’ jobs, they pile our companies with debt, they fleece all of us by not paying their fair share of tax and then expect us to be grateful.”
Mr Lambert was careful not to criticise private equity tax arrangements, saying: “We need clarity on what actually is going on before we spring off and come up with solutions.” But he adds: “My feeling strongly always has been that if it is a duck, tax it like a duck; if its income, tax it like income and if its capital gains, tax it like capital gains.”
The CBI director-general was much more forthright in supporting calls for greater disclosure by private equity. He said: “It is important that private equity companies do disclose more than they have been doing. They disclose an awful lot to their owners, but there are other stakeholders who need to know what is going on. They include employees, customers and creditors.”