BusinessPeople In BusinessMoulton blames Brown for private equity boom

Moulton blames Brown for private equity boom

Private equity chief pinpoints withdrawal of dividend tax credits in 1997 as the catalyst for the growth of private equity deals

The head of Alchemy Partners, Jon Moulton, has said that the current private
equity boom was sparked by Gordon Brown’s removal of dividend tax credits in
1997.

Moulton – well-known for his forthright views – issued the broadside as he
was grilled by the
Treasury
select committee
yesterday.

At the hearing, Moulton said: ‘Debt became more favourable in the UK when the
tax credit was taken off dividends. The system has been changed to favour debt
over equity.’

Moulton claimed that Gordon Brown’s decision had fuelled the massive growth
in debt-financed buyouts of public companies.

His comments are set to fuel the controversy over the credits, which had been
available to company pension funds, but their removal has been blamed for the
loss of billions of pounds to schemes and the closure of final salary-based
pensions at blue chip UK companies.

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