Unions round the world unite against private equity threat

Union leaders from the world's biggest economic powers will meet in Paris this week to take on what they view as the growing threat to their members from private equity.

The meeting, set for Friday, was called in the light of intensifying tensions between unions and the private equity industry, particularly in the UK.

"We are going to call for an international taskforce to be established to look into regulation of private equity," said Andrew Lent, head of economic and social affairs at the TUC. The meeting has been organised by the TUAC, the union advisory committee to the OECD. Representatives from 12 countries, including the UK, Japan, Germany and France, will push for German Chancellor Angela Merkel, the current president of the G8, to form the "taskforce".

Private equity firms raise investment pools to buy companies, restructure them and sell them on. Often this involves layoffs and so sparks the anger of unions, which intend to call for reforms in three main areas: disclosure; the huge debts imposed by buyout firms on the companies they buy, and job losses.

Mr Lent has been invited to speak at the meeting to recount the TUC's success in moving the private equity debate into the mainstream. The TUC and the GMB union have mounted a strong campaign, organising protests and pressuring politicians to call for greater regulation of the industry. Last week, Treasury minister Ed Balls responded by announcing an inquiry into the treatment of the "shareholder loans" often used to finance takeovers. The British Venture Capital Association also set up an internal committee to address concerns over the industry's lack of transparency.

"Since January this has become a massive issue, and in the UK we are really in the eye of the storm," said Mr Lent.

A BVCA spokesman said: "We welcome the opportunity for the unions to get a better understanding of the benefits... a strong private equity industry creates."