Private equity pioneer Moulton urges more draconian cuts

PRIVATE equity pioneer Jon Moulton has claimed that the coalition government is doing little better than its predecessor in handling the recession, and that more draconian cuts will be needed to avoid a prolonged and languid recovery.

The outspoken founder of Better Capital and former head of Alchemy Partners has accused government ministers of "deferring the pain" in a bid to retain the popularity that allowed them to wrest control from Labour earlier this year.

Though Moulton was a fierce critic of Gordon Brown's leadership through the global economic downturn, he said he has seen little improvement since the coalition came to power.

"The cuts are not deep enough, and they are not fast enough," he told Scotland on Sunday. "That is not a very popular view, but my concern is that we are basically spending our efforts on pain aversion as a method of policy development.

"The UK is by any historic standard over-leveraged and overspending. The deficit is increasing by 400 million every day, and something has got to be done to stop that."

The tycoon takes an equally dim view on the future of the euro, which has come under heavy pressure as the debt crisis has pushed the economies of some member states to the brink.

Moulton said he would be "really startled" if all 16 current Eurozone members were still part of the same currency club within the next few years.

Europe's single currency has been rocked by continued speculation that it could fail or be broken up as pressure has mounted from this year's bail-outs of Greece and Ireland.

Meanwhile, the cost of insuring Portuguese, Spanish and Italian bonds has been on the rise, suggesting these countries could be the next in need of rescue.

Whatever the case, Moulton reckons last weekend's rescue package won't be the end of Ireland's woes.

"The Irish bail-out looks deeply implausible for any amount of time," he said.

Moulton, who is speaking at an event in Edinburgh tomorrow, rocked the City last year when he stepped down from the firm he founded in 1997 - Alchemy Partners - a year earlier than planned. He wrote an explosive letter to investors in which he laid bare his disapproval of managing partner Dominic Slade.

Moulton said he would be "really startled" if all 16 current Eurozone members were still part of the same currency club within the next few years.

Europe's single currency has been rocked by continued speculation that it could fail or be broken up as pressure has mounted from this year's bail-outs of Greece and Ireland.

Meanwhile, the cost of insuring Portuguese, Spanish and Italian bonds has been on the rise, suggesting these countries could be the next in need of rescue.

Whatever the case, Moulton reckons last weekend's rescue package won't be the end of Ireland's woes.

"The Irish bail-out looks deeply implausible for any amount of time," he said.

Moulton, who is speaking at an event in Edinburgh tomorrow, rocked the City last year when he stepped down from the firm he founded in 1997 - Alchemy Partners - a year earlier than planned. He wrote an explosive letter to investors in which he laid bare his disapproval of managing partner Dominic Slade.