George Osborne, UK Shadow Chancellor, last night joined the small but growing band of vocal supporters of the private equity industry, speaking at the annual dinner of the BVCA. Tony Blair and Ed Balls, the UK economic secretary have both signalled their support.
He told the gathering, which included Sir Ronald Cohen, Apax Partners founder and a close adviser to Gordon Brown, to stand up to the short-sighted, narrow minded attacks from the left.
“But in return,” Osborne said, “[The industry must] be more transparent, shoulder the social responsibility that being a mature industry brings, and work with me to develop much more real start-up venture capital. You fulfil your side of the bargain and I will deliver mine.”
He toasted the industry’s success and its economic impact: “Listen to the critics and you would think that the only winners were a secretive bunch of millionaires. But the real winners are the millions of people with pensions invested in the funds that invest in you.”
Osborne said the industry should not be afraid of transparency and that ownership of household names like Birds Eye and the AA, let alone Sainsbury and Boots, would mean more transparency to wider society was necessary.
He challenged the industry to embrace green policies for the businesses it owns: “Good governance and social responsibility are not costs to be cut. For the most successful and forward looking businesses are also the pioneers of good practice.”
He praised the industry for its charitable work and its social investment and encouraged it to do more.
Finally Osborne reminded the industry the tax treatment that it works under was introduced to boost real venture capital. He challenged the gathering to improve its record of venture funding, “in not just owning the household names of today – but in finding and backing the household names of tomorrow.”
Rod Selkirk, chairman of the BVCA, welcomed Osborne’s calls to action and restated the industry association’s commitment to increase its level of disclosure. But many in the room were sceptical there was much more the industry could do to improve the fate of UK venture while its record of returns to investors was so erratic.