Private equity prepares its defence

From Today's Telegraph

The British private equity industry is preparing to take the stand to mount a defence against its detractors as the Treasury Select Committee publishes the full agenda for its inquiry into the sector.

The giants of the industry - including Blackstone and KKR - are set to go head-to-head with unionists including the GMB and Unite in front of the committee, which is chaired by veteran Labour MP John McFall. The inquiry follows months of claims by trade unions and Labour politicians that the private equity industry cuts jobs and benefits from tax breaks.

The committee's decision to hold the inquiry was announced in March, after almost six weeks of constant claim and counter-claim by the two sides.

As part of its terms of reference, the committee said it is particularly interested in discussing the regulatory environment surrounding private equity funds, taxation, and the economic context in which the industry operates. Interested parties were asked to submit filings ahead of a May 9 deadline to help the committee's understanding of the key issues.

But the release of the full timetable for the three-day inquiry highlights that the approach is a very open. As well as the obvious private equity houses that will be asked questions, the committee has asked not only TUC general secretary Brendan Barber to attend, but representatives from both the GMB and Unite unions.

Industry body the British Venture Capital Association (BVCA) will also attend, as will a financial markets group of the London Stock Exchange, the Association of Investment Companies, the Association of British Insurers and the CBI.

The sessions are likely to be the first time that the industry learns of the initial thoughts of Sir David Walker - who is chairing an industry committee to look into transparency and disclosure and who is due to attend on the final day. The sessions begin on June 12, with the second and third sessions taking place at Portcullis House on June 20 and July 3.