Davies: Treasury misses trick in PE circus

There is something very odd about the way the Treasury Select Committee has approached the private-equity tax issue. It's not surprising that MPs should wish to have a bit of harmless fun at the expense of the Masters of the Universe. But the substance of the issue is that the private-equity boys (they all are, it seems) have been the lucky beneficiaries of a Treasury tax wheeze for entrepreneurs, which has given them an uncovenanted jamboree. No such luck for their cleaners, sadly.

by Howard Davies
Last Updated: 31 Aug 2010

No-one seems to suggest that they have broken the law, so surely the question is why the scheme was drafted in the way it was - and that is a matter for the Treasury, or its creature HMRC. Yet the Treasury has not been summoned at all, and the private-equity industry was asked to explain why the rules are as they are. Predictably, they struggled... Odd.

Well, perhaps not so odd in that John McFaul, the chairman, is performing his loyal role as human shield for his fellow Scot, Gordon. But what are the Tories on the committee up to? They could have given the Chancellor (or his representative on earth Ed Balls) a difficult time in his last week in the Treasury but, once again, they have dropped the ball.

George Osborne has now announced a review of private equity. Goodness knows what that will produce. But they have already missed the political trick.


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