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LONDON - The labour movement has opened a new front in its war with private equity by urging union pension fund trustees who help control £300 billion ($837 billion) worth of assets not to invest their money with "casino capitalists" and "amoral asset strippers".
TUC general secretary Brendan Barber also signalled the campaign against private equity is to go international with a call on the leaders of the G8 group of industrialised nations to impose tougher corporate governance standards on the industry.
The TUC intends to produce a briefing shortly for its network of more than 1000 pension fund trustees, spelling out what it sees as the threat from private equity to pay, pensions and jobs.
This will urge them to take a "long, hard look" before they invest in private equity and will be followed up by a gathering in Paris of union leaders from more than 40 countries to discuss how the industry can be made more accountable.
The GMB has already called for the industry to be more tightly regulated and for its tax breaks to be removed. But Barber's speech shows opposition to private equity has become a campaign uniting the entire labour movement.
In his City University Leaders Lecture, Barber acknowledged that sometimes private-equity firms turned around failing businesses for the benefit of their investors, pension funds included.
"Sometimes, however, they give the impression of being little more than amoral asset-strippers after a quick buck - casino capitalists enjoying huge personal windfalls from deals at the same time as they gamble with other people's futures," he said.
The TUC leader also attacked the industry for disclosing as little as possible about what it did and, because it was often "leveraged to the hilt", leaving employees to shoulder much of the risk. He said union leaders would pass on their concerns to the German Chancellor, Angela Merkel, ahead of a G8 summit she will chair in June.
- INDEPENDENT
