UK Labour Courts Private Equity Investors While Mulling Tax Hike

(Bloomberg) -- UK Labour Party leader Keir Starmer and Shadow Chancellor of the Exchequer Rachel Reeves have held talks with private equity companies to discuss boosting investment in Britain, even as they plan to raise taxes on the same firms, people familiar with the discussions said.

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Executives from Blackstone, Advent International and Brookfield Asset Management were among those to meet the Labour leadership team, the people said. Starmer praised the industry’s role in boosting economic growth during the talks, they said. The Financial Times first reported the meetings.

While the outreach highlights Labour’s ongoing efforts to woo British business leaders ahead of a general election that’s widely expected next year, it also lays bare some of the tensions that exist. Labour has pledged to change the way private equity bosses are taxed on so-called carried interest — the money they make from deals.

A Labour spokesperson said Tuesday that the party would end the “carried-interest loophole” for private equity fund managers, estimating the move would raise some £440 million ($550 million) annually.

The discussions come as the governing Conservative Party battles Labour’s attempts to charm business leaders and the City of London, which was demonstrated by Starmer and Reeves traveling to Davos in January.

Prime Minister Rishi Sunak on Monday hosted a conference in London with around 200 chief executive officers and other business leaders as he tries to rebuild the Tories’ fractured relations with business since Brexit.

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