Eagle back-tracks over Duke Street talks(2)

Angela Eagle, the British MP who told Tuesday’s Treasury Select Committee that she had been unable to arrange a meeting with Duke Street Capital over planned job losses at a Burton’s biscuit factory in her constituency, has revealed that the buyout firm did contact her after all.

UK MP Angela Eagle met with Duke Street Capital on Wednesday, just 24 hours after erroneously telling a Treasury Select Committee that the buyout firm had ignored her attempts to set up a meeting.

She admitted to PEO yesterday that Duke Street had in fact called her the previous Friday to make an appointment. However, she said she had failed to receive the message. “Duke Street Capital rang my secretary and arranged an appointment although I wasn’t notified until after the commission inquiry.”  

Eagle met with Duke Street Capital’s managing partner Peter Taylor and chief executive Paul Kitchener to discuss the closure of the Burton’s biscuit factory in her Wallasey constituency, which could lead to more than 800 job losses.

Following the meeting, Eagle said: “Both Taylor and Kitchener assured me the consultation was genuine and we are focused to see if we can maintain jobs in the region. I don’t care about the structure of ownership as long as local people aren’t affected.” The two parties said they were having an ongoing detailed dialogue to achieve the restructuring of the business.

The plant has seen £4 million of government money injected into the business. Despite this, Eagle said: “My constituents took on a three year pay freeze and created £12 million cost savings, only to be told they were closing the Moreton plant down.”

Local stakeholders in the Moreton plant believe the company’s owners could achieve their goals by considering alternatives to the drastic move of closing down the plant, she added. 

According to one investor, Duke Street is disappointed that a strategic decision to close one factory has aroused political hostility, even though the decision would lead to a greater overall net job creation rate for Burton’s as a whole.

This morning Taylor became the latest senior industry figure to suggest that private equity practitioners should be paying more tax.  Taylor told the Daily Telegraph newspaper that the 10 percent rate of capital gains tax (given taper relief) was “unnecessarily low”, suggesting that a rate in the region of 15 to 20 percent was more appropriate.

Taylor, who claimed to be speaking “independently from his role as managing partner of Duke Street”, follows in the footsteps of Sir Ronald Cohen and SVG’s Nick Ferguson, who have both criticised the tax break recently. However, Taylor’s comments carry particular weight as he is the first active investment professional to advocate a change to the status quo.