One of Scotland's top chief executives has joined the debate over the role of private equity in the economy, by saying that debt-backed companies are dodging corporation tax while their backers drain huge fees.

Rupert Soames, who has led the spectacular recovery of Aggreko over the past three years, said yesterday: "In general, private equity partnerships are excellent owners of businesses, and they are populated by exceptionally talented people. They make great returns for their investors, and that helps our pensions." However, he went on: "The great investment returns private equity are able to produce come in part from the fact that many companies they own are deliberately structured in a way that means they pay little or no corporation tax."

Soames said that if large swathes of the UK economy paid less tax, other companies and individuals would pay more, and further, the taxpayer was effectively subsidising the payment to private equity partnerships of the "huge fees charged to investors".