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UNI global union warned of the social implications of increasing private equity buyouts during a first-ever meeting with the British Private Equity and Venture Capital Association (BVCA) in London on March 5.

The interests of employees and communities have to be taken into account, said the UNI team - General Secretary Philip Jennings and Deputy General Secretary Philip Bowyer.

Public criticism of private equity companies has been getting louder in recent weeks. Unions have been joined by politicians and members of the business community in expressing real concern about the activities of private equity groups

UNI Global Union welcomed the first opportunity to discuss with representatives of the BVCA, which represents Europe’s leading private equity companies.

The wide range of investment activity of private equity, from start-ups to buy-outs, was raised during the discussions. It is recognised that venture capital can play an important role in developing new businesses and services.

What has given rise to legitimate concerns has been the tide of equity buy-outs and the increasing size of the deals, involving sums of up to $50 billion and rising.

UNI stressed that in the pursuit of buy-out deals, “the social implications on employees and communities have been totally ignored. The interests of employees must be taken into account. The private equity community must address this social deficit. Nor can they brush aside the questions of unfair tax breaks, the avoidance of regulation, disclosure and the unmerited, grossly exaggerated rewards taken out of companies by private equity groups.”

In response to criticism, BVCA has created a working group under the chairmanship of Sir David Walker. BVCA invited unions to contribute to the work of the group.

Philip Jennings questioned the effectiveness of voluntary codes. He encouraged private equity groups to develop a serious dialogue with unions in the UK, Europe and globally.

UNI has warned that over-large debt burdens can kill off bought out companies, destroying jobs and leaving banks and pension funds with massive bad debts - a point confirmed by this week’s report from Ernst and Young.

* UNI is the global union for skills and services with 15 million members in more than 900 unions around the world.