The whole debate will be resolved in a few years time when the current rash of private equity deals reach their conclusions and the businesses are sold on. If high profile deals with Boots, the AA, Man Utd etc. result in successful sales back to the market at significant profit then it would be hard to argue that private equity hasn't contributed to the wider economy. If, however, some of these deals fail resulting in suffering for employees and investors then the government has a duty to clamp down on the PE industry through tax and regulation.

Stephen Grindle, London, UK

I couldn’t agree more. Aside from the arguments about personal taxation, I cannot see the problem with growing private equity involvement in the economy. In areas such as R&D investment, improved productivity, employment and profitability, private equity has proved itself to be a superior model. As a result, Britain’s economy will only become more competitive. Ultimately the objections come down to plain old fashioned envy from a bunch of unreformed socialists in snazzy suits.

James B, London, UK

Readers should listen to the playback of the treasury select committee meeting on Wednesday. I have. I was shocked to realise real socialists were not extinct.

This is about more than "how private equity is regulated or taxed". This is about the structure of corporate Britain and how it competes in the global economy.

Listen carefully to the words of Private Equity's critics. While popular socialists focus on tax, the real socialists' agenda is preventing change, restricting the benefits of ownership, and limiting individual freedom.

Thanks to www.parliamentlive.tv we can all listen to the evidence.

Robin, London,

The article from Anatole is spot on. The notion that the entire private equity industry is "asset stripping" is ludicrous; PE investors drive profit increases largely through investing further capital (including human). In the instances where jobs are cut, they are simply making inefficient companies efficient. The alternative is that the underperforming company continues becoming uncompetitive putting the entire workforce at risk.

Philip, London, UK

Lets see freakish lifespan 100 years, 90 percent = 90 years.

Freakish indeed!

Mark, I can see you are not in the biz.

Gary, Basildon,

Private Equity is under fire because it ceased to fund startups in favour of being robber barons doing takeovers, some hostile. It is Merchant Banking.

The farce of taper relief of 10% after 24 months holding is patently obvious - it should be 60 months to appear less like a fast-money scheme. They over-egged the pudding.

Greed becomes simply too blatant to ignore and embarrassingly so. There is no reason for CGT to be reduced to a 2-year holding period and IHT to be set at such ridiculously low levels. Which political parties are funded by private equity ? Which have been bought out ?

TomTom, Leeds, England

Totally agree with you Anatole, stuff the socialist dinosaurs and their backwards unions. Profit is great!!!

Tom, London, UK

Agreed. Moreover, it's not the private equity giants that make the tax law. The select committee of MPs voted for the tax laws that were proposed by the Chancellor. It's because of our useless MPs and our even more useless chancellor that we have such a high average rate of tax and so many tax anomalies. If the chancellor didn't think he was oh-so-superior he would realise that he doesn't have a revenue problem, he has a spending problem.

Philippa Pirie, London,

If Private equity is so beneficial to businesses why are the figures for investment and R&D so dissappointing at such a bullish stage for the economy?. Doesn't that suggest that the main driver for private equity has been to maximize "sweating the assets" of the companies they buy whilst also circumventing the much tougher regulatory environment of a public company listing.
This bull run in equities has been driven by the merger and acquisition environment. Where are the retail investors of the dot-com era? Amercian investors were net sellers of equities in the last year. They don't believe in this bullish scenario because they got their fingers burnt in 2000. Without the retail investor to pump up prices (witness the chinese market right now) means companies shares are relatively cheap and therefore enticing to private equity. That is the driver ,NOT NEW EFFICIENT FORMS OF MANAGEMENT. Most studies show that privately listed firms,that were previously public ,don't outperform.

Dominic O'Dell, London, UK

A handful of freakishly intelligence and competent individuals who are lubricating the cogs that work the invisible hand in our capitalist society.

They may only pay 10% tax, but given that they work 90% of their lives (compared to that standard 60/40 ratio), I think that's a fair trade.

Having said that, for the benefit of British business, I think these individuals should be made to give free seminars in management techniques.

Mark, Woking, UK

If two people buy two houses, and rent to each other, they can claim back tax on the mortgage interest, which is obviously wrong. Attempts to encourage investment by tweaking the tax system always causes those sorts of problems.

However employees, including company directors, never have interests which coincide exactly with those of the shareholders. Hence paper bonfires have to be initiated from above. As a general rule the economy benefits, and even the pen pushers themselves find better jobs in the long run, but you always have a few personal tragedies.

Malcolm McLean , Bradford, UK

While the total number of employees may decline only slightly, and then increase, many of the employees who were at the company lose their jobs. This is because they have little interest in doing much work, but in a public company this was tolerated by management as part of the general strategy of living well and not rocking the boat.

The private equity investors will clean house first at the higher management levels, but the managers they hire will then get rid of the employees they have inherited and replace them with workers who are willing to work hard in return for high pay. Many of the employees who lose their jobs will have a difficult time finding another position pays only moderately but does not require much effort. This is why they are so upset.

Jonathan, NYC, USA

We simply don't like seeing others make lots of money. It's a British thing!

Tony, London, UK

I have read many reports on growth, rationalisation, restructuring, redundancy, increased profits, core businesses, asset stripping, shareholder equity, refinancing etc etc etc. I don't often see the customer being mentioned. Probably the masters of the universe wouldn't know what a customer was if it fell out of the sky and fractured their skulls. Cadbury is going to lose 8000 jobs and Jessops close 80 stores. This will improve their 'balance sheets' but how exactly will it improve my chocolate bar or my photos? And what is this obsession with 'growth' anyway. What's wrong with staying the same and being happy to provide a service? Does Tesco need to build a new store every seventeen seconds. Does WalMart need to annexe China? In the end they're only selling baked beans, it's not life and death.

eric campbell, harrogate, uk

Geared capital returns will always seem huge to the number blind.

Changing the taper relief rules would impact the swathes of landlords ("buy to let" is a redundant phrase) who have seen their portfolios' values rocket in recent years.

Legislating for the few is the driver behind much anti-competitive bureaucracy and our over-complicated tax system.

Richard Boyce, Haywards Heath, Sussex

The frightening thing is that with the socialistic views (some bordering on communism) in this country, profit has become a dirty word. People simply don't seem to realise that the purpose of a business is not merely to be a money tree that pays salaries. A business is there to earn a profit and people go into business with the hope that the larger risk they are taking is going to generate larger rewards.

Why take a big risk if you are going to be no better off than Joe Soap and especially when you could end up worse?

Chantel, UK,

It's under fire because it represents the uneasy, unarticulated view that the markets are frothing to a point where not only a correction but a crash are long overdue.

Peter Beckham, Brighton, UK