Unions launch campaign for interest relief reform

Unions will this week launch a vitriolic campaign against the private equity
industry when they press the Labour Party to reform tax relief on interest.

The GMB Union , has,
according to the
Sunday
Telegraph , accused private equity groups of asset stripping. This
week the union will place tax relief on interest – one of the main drawcards for
private equity – at the centre of the contest for the Labour deputy leadership.

Peter Hain , one of
the front runners for the deputy leadership, has given is support to the
reforms. However, Jon Moulton, the private equity veteran from Alchemy Partners,
rejected the criticism of the industry and warned of the consequences of
scrapping interest relief on debt.

‘The UK only has one decent industry and it’s called financial services,’
said Moulton. ‘If we mess around with that we’ll be at the IMF asking for loans
for food. If you eliminate interest deductions for UK acquirers, you put the UK
at a massive disadvantage against Europe and the rest of the world.’

Further reading:

Tax advisers dismiss US-style interest relief

The mother of all tax rows

Tax
relief measures ‘will make UK less attractive’