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Hain calls for ban on asset stripping
By Paul Waugh, Evening Standard Last updated at 09:37am on 27.02.07
Peter Hain: concerns
Private equity firms should be barred by government from asset-stripping, Northern Ireland Secretary Peter Hain has urged.
In the first comment by any Cabinet minister on recent complaints about the companies, Mr Hain said he shared the GMB union's "concerns" about their activities.
Labour's long-standing donations from equity specialists, such as Sir Ronald Cohen's Apax, have been seized on by some union leaders.
The Electoral Commission is expected to publish new figures today showing that two private equity firms made further donations to Labour.
Equity firms have snapped up big names in recent years, with the AA being the latest. Critics claim the firms are only interested in buying companies at low cost and then breaking them up, sacking staff and cutting pensions. But supporters have pointed to a new US deal where private equity firms have pledged to "green" the world's largest energy company, TXU.
Mr Hain defended the practice of taking the cash from the right firms, stating that it was wrong to assume the rich should not back Labour.
Yet the Northern Ireland Secretary, who is a contender for the party's deputy leadership race and has said some City bonuses are "obscene", stressed that he wanted to "distinguish the good from the bad".
"We want policies that make sure that the objective of investment by private equity funds, for example, is to grow companies, is to rescue them, is to maintain as many jobs as possible, not to asset-strip them," he told BBC1's Sunday AM.
Shadow chancellor George Osborne defended private equity firms as a success and suggested Chancellor Gordon Brown was failing to confront a lurch to the Left among Labour's deputy leadership contenders. "You've not heard him come out and criticise these candidates for saying these things," he said on Sky's Sunday Live.
Reader views (5)
Many of the readers will be too young to remember this but Mr Hain came to these shores some 35 years ago to protest that we were playing rugby against his homeland, South Africa (then in the grips of apartheid). The icon of the anti-apertheid movement, Mr Nelson Mandela, was released from prison nearly 17 years ago and, as we all know, the evil apartheid regime collapsed thereafter - so isn't about time Mr Hain went home?
- Mark Plummer, London, England
Can he and his immediate colleagues first be stripped of the assets that rightly belong to the taxpayer and which they have so shamelessly helped themselves?
- Givenuphope, London England
Hain's idea: more regulation, don't we have enough? Some bod from the council will soon barge into my house to see if the light bulbs are causing global warming or somesuch - I hate control freaks like Hain. At the next election, when Scotland departs the Union and takes their Labour MPs with them England will be a Labour Party free zone and we won't have to suffer the outpourings of twits like him. Oh and we can keep our £11 bn a year as well.
- Dave, Cornwall
What about the Labour Government asset-stripping pension funds Mr Hain?
- James Elliott, Eastbourne UK
Union support for a Deputy Leadership campaign springs to mind here; but I wonder, would Hain dare seek to ban the whole City of London in his insatiable thrust for political power?
Though, on second thoughts, he'd probably have to run than one past his mentor, one Gordon Brown esquire.
- Ted, Shetland
