Last week, in a largely unreported decision, Rishi Sunak quietly announced that private equity owned companies would now be eligible for government bailout loans.

This means that fabulously rich private investors like Blackstone, CVC Capital Partners, Apax Partners, Permira Adviors, and Bridgepoint will have access to government business support schemes such as the coronavirus business interruption loan scheme (CBILS) and coronavirus large business interruption loan scheme (CLBILS).

In many ways, this aligns with the government’s broader strategy towards COVID support schemes: they are primarily designed to support ‘business’. And this means that although some jobs may or may not be saved, this is incidental. The main aim is to preserve the corporate economy.

To see why this is problematic, we can look at the record of the COVID-19 Corporate Financing Facility loans – emergency loans provided to corporations by the Bank of England. Rolls-Royce took out £300m and announced 3,000 job losses; Airbus took out £500m and announced 1,700 UK job losses; Ryanair took out £600m before forcing workers to agree pay cuts on threat of 3,000 job losses; easyJet took out £600m and announced 1,900 job losses; and British Airways borrowed £300m which ultimately funded a 10% redundancy scheme.

And so the cycle of corporate bailouts worsens the economic fallout of COVID. It is not popular to say this, but we need to face up to the truth: the government’s business support schemes have not only been a major support to their friends in business – they have made the chances of our economic recovery much worse.

The British Private Equity and Venture Capital Association, the industry body that has been lobbying the Treasury in recent months for access to the government COVID schemes, claim that their members employ three million British workers. Given the rapid growth of this model recently (the number of companies backed by private equity rose 15% last year, and this growth is set to continue) this is a surprisingly high, but is probably an accurate estimate.

Private equity firms are often referred to as ‘vulture capitalists’ because of the particular model of investment they use. Private equity firms use their financial muscle to step in and bail out companies that are in trouble. Famous examples include Blackstone’s takeover of Merlin entertainments, the owners of Legoland and Alton Towers, and the recent purchase of Bella Italia, Cafe Rouge and Las Iguanas by private equity firm Epiris a month after the loss of 2,000 jobs in those chains.

Often these takeovers use what is known as a ‘leveraged buyout’ model, whereby the private equity firm borrows large amounts of money to buy firms after they have been refused loans by the banks. These so-called ‘leveraged buyouts’ are the bread and butter of private equity. Because they are often the last hope, they are able to acquire a failing company for a fraction of its previous value. Once private equity firms have control, they can then either invest further, or make further job cuts and sell off the company’s assets (often referred to as ‘asset stripping’).

Although the term ‘vulture capitalists’ is widely used to describe these firms, it is not particularly accurate as a description. After all, Bella Italia, Cafe Rouge and Las Iguanas are still alive – they are not merely carcasses. They survive on the high street, albeit in a more emaciated state, and with a venture capitalist’s axe ready to fall on them at any moment.

A more appropriate metaphor is ‘parasite.’ The Oxford English Dictionary defines a parasite as “an organism that lives in or on an organism of another species (its host) and benefits by deriving nutrients at the other's expense.” This is precisely what private equity does. It may try to keep its host alive, but if it dies, so be it. Off the parasite crawls, to find another host.

And there is another reason to call them parasites. Private equity firms are not only hugely rich, with access to funds that rival the big banks, but their model is based on racking up huge debts that are secured by the assets and holdings of the companies they buy over. By changing the rules to allow these companies to access emergency COVID funds, Rishi Sunak has effectively gifted bailout loans to companies that leverage more debt to bail out other companies. It may save some jobs, but the real gains are made by the richest investors. The chancellor is effectively using taxpayers money to pay off the broker. Those funds preserve this system of parasitical capitalism.

To top it all off, private equity capital ends up not being reinvested in the economy, but in a huge pile of cash, waiting for the next leveraged buyout. It was estimated the global value of this pile of “dry powder” capital in January this year was $1.5 trillion.

In my new book ‘Ecocide: kill the corporation before it kills us’, I argue that it is the particular form adopted by corporations that prevent our economies meeting basic human needs. This counts as much for the response to COVID 19 as it does for the future of the plant. The corporation eradicates the possibility that we can put the protection of the planet before profit. Indeed, private equity firms are key drivers in the acceleration of fossil fuel development.

The emergency funds committed by the Treasury to dealing with COVID-19 are in many ways unprecedented. For this reason, they must be more prudently used to build the long term jobs that we need in a truly sustainable economy.

Future generations will ask why this unprecedented effort was not used to transform the economy via a Green New Deal or develop an economic model robust enough to survive future pandemics. What will our answer be?

“Sorry, but our government chose to bail out the parasites instead?”