Brooks Newmark on the Private Equity/Venture Capital Industry

Brooks Newmark stresses that in order to remain so successful at attracting private equity, the UK must maintain an attractive tax regime.

Mr. Brooks Newmark (Braintree) (Con): For clarification, the reason that the UK is so successful in attracting private equity is our historically-in recent years-attractive tax regime. I hope that my hon. Friend is not suggesting that carried interest should be viewed as income, because all other major western countries view it is a capital gain. It is important that, in order to remain competitive, the UK maintains a competitive carried interest regime.

Mr. Field: I accept my hon. Friend's point. He has a track record in private equity and has been a big supporter of it in various debates in the Treasury Committee. I want income to be treated as income, and capital as capital. There has been a muddying of the water, and if it were my job to look after such matters, as it is the Minister's, I would take a slightly harder line than perhaps my hon. Friend would prefer. In considering carried interest, we should look beyond the benefits that perhaps have applied in recent years. In effect, some elements of carried interest constitute income, and should be taxed accordingly.

Mr. Newmark: Although I might disagree with my hon. Friend on his tax analysis of the regime that we should have, he makes an excellent point about regulation. On transparency, which was a point brought up during Treasury Committee hearings, I hope that he supports the Walker review and its suggestions for the behaviour of private equity.

Mr. Field: I have learned that getting one out of two from my hon. Friend is never a bad score. I thank him for his support.