Private equity industry of 'huge importance' to UK economy, says David Gauke
Chief Secretary to the Treasury David Gauke has reassured an audience of private equity firms that the industry is of "huge importance" to the UK economy, a day after Theresa May pledged to crack down on corporate greed.
Mr Gauke told the British Private Equity & Venture Capital Association (BVCA) summit that the industry's contribution was recognised by the Government.
"Your industry is of huge importance to the continued success and growth of our economy," he said, adding that private equity and venture capital funds funnelled £10 billion into "hundreds" of UK businesses last year.
"It means more jobs, more tax revenues, more wealth created, all of which goes to provide the foundations for us to establish a better society for everyone."
His comments followed a much-scrutinised keynote speech by Ms May at the Conservative Party conference in Birmingham on Wednesday, which pointed a finger at greedy firms.
The Prime Minister said: "If you're a boss who earns a fortune but doesn't look after your staff, an international company that treats tax laws as an optional extra... a director who takes out massive dividends while knowing that the company pension is about to go bust, I'm putting you on warning. This can't go on any more."
She added that the Government would be prepared to intervene if companies were "exploiting the failures of the market in which they operate, where consumer choice is inhibited by deliberately complex pricing structures, we must set the market right".
While he gave no reference to Mrs May's speech, Mr Gauke said private equity interests were being considered as part of the Government's Brexit preparations, and stressed that open and frank communication was "fundamental".
"The role your industry plays in our economy is really important and so too are your views on how we plan our exit from the EU."
However, he went on to take a swipe at David Cameron and George Osborne, saying previous governments failed to invest in business-friendly infrastructure.
"One of the big issues we need to focus on in this country is infrastructure. Because I think it is a fair criticism that over the past few decades, as a country we simply didn't invest enough in the infrastructure we really needed to support our long-term growth and productivity effectively."
Mr Gauke said flaws in road and rail networks, for example, were holding business back.
He added that the new Government has already committed to spending £100 million in infrastructure projects by the end of the parliament in 2020, which will include increasing broadband internet access, boosting flood defences and energy capacity.
"We'll keep looking at whatever infrastructure improvements we can to boost this country's productivity."