British Prime Minister Tony Blair has often been at odds with the labor unions that form the core of his Labour Party. But the Trades Union Congress is giving the premier, set to leave office at the end of June, one last push.
The TUC sent a letter to Blair urging him to switch sides on the hedge fund oversight question and side with his German counterpart, Chancellor Angela Merkel, who has used her country’s presidency of the G8 to push for a code of conduct for hedge funds. To this point, Britain has sided with the United States in opposing essentially any hedge fund transparency measures proffered by the Germans.
“Serious questions are now being asked across the world about the rapid rise of private equity and hedge funds on tax revenues, on jobs and growth, and on the long-term sustainability of economies increasingly based on very high levels of corporate debt,” TUC Deputy General Secretary Frances O’Grady wrote. “Only more detailed investigation followed by the necessary regulation will ensure that new asset classes of this sort benefit the whole of the economy and not just a handful of financial specialists.”
The appeal is likely to fall on deaf ears, as Blair’s designated successor, Chancellor of the Exchequer Gordon Brown, has consistently opposed such measures as well.
O’Grady isn’t likely to be satisfied by a set of guidelines issued last week by the U.K.’s financial regulator, the Financial Services Authority, which give activist hedge funds a wary welcome.
The guidelines express general support for activism, but warned funds that it will not tolerate collusion. Under the new rules, the FSA said hedge funds must disclose their stakes in a company when acting in a group to pursue a strategy or face market-abuse charges.