Private Equity (Transfer of Undertakings and Protection of Employment) Bill

I am grateful to the hon. Gentleman for that intervention. I would like to address the extra aspects of the Bill. The hon. Gentleman says that there will be no difference between private equity takeover and public share takeover companies. He has been talking about the need for consultation, but—I am looking to him in the hope and expectation that he will be able to help me on this—there is a concern that the employees of private equity companies will not receive the same degree of consultation. It is worth considering the implications of additional consultation, beyond that provided for under existing employment rights, for the business of a private equity company trying to complete a takeover. One of the CBI's points—the hon. Member for Shipley referred to this, too—is that because of the speed at which companies sometimes have to be taken over and turned around, to the benefit of the employees, the requirement for consultation will make the timeline unattractive. If extensive consultation is made an institutional requirement, the mergers and acquisitions landscape may become a lot less attractive for investors, with, as the CBI has said, an injection of a great deal more uncertainty and delay. We have discussed the scope of the Bill at some length. Again, there is a big concern about leaving the definition of private equity to the Secretary of State, as defining the term will be extremely difficult for any person or organisation to do. We have discussed whether the term will include venture capital or small innovation businesses. The word ““large”” does not really help us understand exactly what sort of animal we are talking about. That is another aspect of the industry, which is so fluid and moves so quickly, changing its composition quite rapidly. It is therefore much more difficult to pin down who is involved, at what stage, and what level of consultation would be appropriate, for both small and large businesses. I know that the hon. Member for Nottingham, East has his heart in the right place in wanting to prevent exploitation, but just as with the Temporary and Agency Workers (Equal Treatment) Bill, promoted by the hon. Member for Ellesmere Port and Neston (Andrew Miller), the problem is that we are talking about different aspects of business, with different needs and requirements. A one-size-fits-all approach is unlikely to fulfil the requirements of a diverse industry with different needs. If the Bill drove private investors away, as the hon. Member for Shipley said, there would be plenty of other fluid and attractive markets elsewhere in the world. We have been successful in attracting investment into this country. Although we must have a balance of fairness for all people who work in this country—that is absolutely a given—at the same time, our flexibility and fluidity enable us to achieve that competitiveness and attractiveness to investment of all different types. The TUC is clearly not impressed with private equity, but the CBI believes that it has"““A highly significant and beneficial impact on employment and the economic prosperity of the UK””." That is because of private equity's unique abilities. It will often look for underperforming businesses and inject much-needed capital into them. Private equity can restore profitability and turn failing businesses around in a relatively short period. However, to do that it often has to make unpalatable decisions, such as those involving job losses or culture change. People may lose their jobs, but in the long run that may be the only way for more jobs to be saved. The World Economic Forum found that despite initial job losses, private equity firms create 6 per cent. more greenfield jobs. They also create faster growth: their annual sales increase at an average 8 per cent., compared with 6 per cent. growth for FTSE 100 companies. The Bill would stifle that market, and for that reason, the Liberal Democrats do not support it.