The TUC last night branded some private equity groups “amoral asset-strippers” as it joined the growing controversy over venture capital and urged investors to think twice about where they put their money.

Brendan Barber, the TUC General Secretary, said in a lecture that, while some private equity worked to turn around problem businesses, too often “it is about amoral asset-strippers after a quick buck — casino capitalists enjoying huge personal windfalls from deals at the same time as they gamble with other people’s futures”.

The TUC called on the Government to regulate an industry that Mr Barber said “is pretty much allowed to operate with impunity”.

He said that private equity could escape the scrutiny most businesses face because it does not have to declare much information publicly. “Its owners will disclose as little as possible about what they are doing and why. On issues like employment practices and corporate social responsibility, the silence is usually deafening,” he said.

The TUC has calculated that 2.5 million workers — one in six of the private sector work-force — are employed in companies controlled by private equity. Unions want an end to the tax breaks that private equity enjoys on loans.

Mr Barber said that the success of the City should not be a reason not to scrutinise it.

He said: “Does the imperative to go for short-term returns damage companies’ ability to build for the long term? To what extent does the huge wealth created in the Square Mile trickle down to people in Newcastle or Manchester, or even Bethnal Green?”

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