Baroness Bennett of Manor Castle
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Corporate Liquidations
Baroness Bennett of Manor Castle Excerpts(3 days, 15 hours ago)
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Lord Leong (Lab)
Apologies; it is 0.7% growth. I thank the noble Lord for that. At the end of the day, what is really important is that we have to support businesses, and the Government are supporting businesses. Capital gains tax is still the lowest in Europe. In the G7, only the US and Japan are lower than us. Frankly, most employers go into business to create businesses. Sometimes they exit business, and some of our tax reliefs are still better than those of many other countries in Europe.
Baroness Bennett of Manor Castle (GP)
My Lords, several of the corporate collapses that the Minister referred to earlier were associated with private equity ownership and high levels of debt. Moody’s reports that default rates have been twice as high for private equity-owned firms as for others. The Financial Times leading article on 6 June noted that, with exit activity from private equity funds slumping to a historically low level, some private equity firms
“are resorting to … risky … methods of generating liquidity”.
Are the Government concerned about private equity’s impact through these means on both the real economy and financial stability?
Lord Leong (Lab)
My Lords, private equity plays an important role in business support in this country. We have seen private equity companies that have acquired businesses and actually grown them as well. Yes, their track record is not great, but there is definitely a role for private equity in business in this country. Do not listen to the Government. Listen to people in the private equity business. Jamie Dimon said:
“I’ve always been a believer in the UK’s … strengths as a place to do business and there’s much to like about the new government’s pro-growth agenda”.
Yesterday, Nvidia CEO Jensen Huang argued that the UK was in the “Goldilocks” zone with great universities, a good start-up culture and the third-largest amount of investment in AI companies globally outside the US and China.