Ed Miliband launches attack on the private equity industry

ED Miliband, the Labour party leader, will use his conference speech today to attack businesses he labels “asset strippers”.

His speech shows Labour keen to draw a line between “good” businesses that behave responsibly and “bad” firms that make profits recklessly.

Miliband places in the “bad” category firms such as care home operator Southern Cross, which is to cease trading after running up huge debts on its rent obligations after selling and leasing back its care home real estate.

“Let me tell you what the 21st-century choice is: are you on the side of the wealth creators or the asset strippers?” he will tell delegates in Liverpool.

“For years as a country we have been neutral in that battle. They’ve been taxed the same, regulated the same, treated the same, celebrated the same. They won’t be by me.”

But his stance is likely to be viewed as an attack on private equity and its strategy of growing companies by loading them with debt – a tactic that backfired in the financial crisis.

His approach also reverses the pro-private equity stance taken by the previous Labour government.