Richard Lambert, the Director-General of the CBI, told delegates at the TUC conference yesterday that private equity firms should be more open with employees and other stakeholders and that their tax treatment should be investigated.

His comments came amid an attack on private equity by union leaders at the conference.

They demanded changes to its tax treatment, greater accountability and the creation of a database to monitor the activities of buyout firms in Britain and overseas.

Unions led by the GMB have waged a strong campaign against private equity over the past year, accusing the industry of taking money out of the businesses that it buys and cutting jobs and pensions.

Mr Lambert said that the private equity industry had sprung up almost unnoticed, but now “they find themselves in a different role and this has to be recognised . . . It is important that private equity companies disclose more than they have been doing.” On the taxation of the industry, he said there needed to be more clarity of their tax obligations: “If it is a duck, tax it as a duck.

The TUC has called for changes to taxation on private equity and for nondomicile status people, arguing that this would help to tackle the growing inequality between rich and poor.

Mr Lambert told delegates in Brighton: “It is important that the tax system is fair and there are not whacking loopholes. We need to know more about the nondomiciles, about the benefits they bring, about their numbers. It is a legitimate question to ask.”

Union leaders used the TUC to launch stinging attacks on private equity. Maria Ludkin, of the GMB, told delegates that there was no skill in the way that private equity operated.

She said: “These people aren’t masters of the universe, they are simply slick operators who have worked out how to work the system. It is not difficult to become wealthy if you pay less tax than your cleaner.”

She said that it would be pointless to rely on self-regulation to improve standards, as buyout companies have suggested. “I don’t think private equity firms have a moral compass. In our experience, they only have a cheque book and a calculator.”

Jack Dromey, deputy general secretary of Unite, said: “There are reputable employers, but there is a world full of rogues.” On self-regula-tion, he said: “Self-regulation in the Cayman Islands? In the immortal words of John McEnroe, you cannot be serious.”

Jeremy Dear, general secretary of the National Union of Journalists, said that private equity was damaging local democracy and accountability by cutting job numbers and standards in the media.

He said that some buyout firms demanded returns of up to 30 per cent on their investment. “That’s not profit, it is profiteering.” He accused private equity of “grand larceny on an industrial scale” because of job cuts and the closure of pension schemes.

Mr Lambert also used his speech to defend the CBI’s opposition to the European agency workers directive, which calls for temporary workers to enjoy the same benefits as permanent employees after six weeks.

Unions have said that a lack of rights for agency workers and an increase in the use of agency labour is creating a two-tier workforce. Mr Lambert said that Britain needed working flexibility to compete in the global market.

The CBI boss struck a more conciliatory note with the TUC than his predecessor, Digby Jones, now Lord Jones of Birmingham.

He told the TUC: “We have a common interest in fostering an open and constructive discussion about the benefits and costs of globalisation and the policies that will be necessary to support the one and minimise the other.”

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