Alternative Investment Fund Designation Bill [HL]

Baroness McIntosh of Pickering Excerpts

2nd reading
Friday 1st March 2024 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I am delighted to follow the noble Lord. I was introduced to investment trusts by my late father, who was a proud Scot and a modest investor. Sadly, since his passing, my investment portfolio seems to have been on the downward trajectory.

I congratulate my noble friend Lady Altmann on the excellent and timely Bill before us, along with the noble Baroness, Lady Bowles, who is supporting it. I lend my full support for the proposals contained therein. I commit to their energy and enthusiasm for the provisions of the Bill and the aim of protecting investors, whether minor or major, who are shareholders in investment trusts. My noble friend called for the urgent issue of guidance, and I support her request. Can my noble friend the Minister say whether there is any reason why guidance could not be issued? That would support the call from the noble Lord, Lord Macpherson, for an urgent review and revision of the law.

I press the Government on the matter of a consultation. Will my noble friend the Minister bring forward a consultation at the earliest possible opportunity, with a view to introducing legislative measures in short order thereafter? Presumably, that could be by way of statutory instrument and regulations, rather than the need for primary legislation such as that before us today.

Further, does my noble friend the Minister agree with my noble friend Lady Altmann, the noble Baroness, Lady Bowles, and others who have spoken that the current situation is unacceptable and—as the noble Lord, Lord Macpherson, said—highly misleading to potential investors? This is a serious but typical case of gold-plating, whereby, as I understand it, the original directive was not prescriptive but a domestic interpretation, through regulation, added bells and whistles.

This is not the only example of this. From my personal experience of serving as a Member of the European Parliament, I know of the abattoir directive. That was very much a framework directive, but the home department, the Ministry for Agriculture, Fisheries and Food, looked at it as the opportunity to close a number of family-run abattoirs, with the perverse effect that animals had to travel further to slaughter. Another example is the toy safety directive, which, in its domestic implementation, added all sorts of provisions that meant that the donation of second-hand toys to charity shops dried up. That led to the then Trade Secretary—the noble Lord, Lord Heseltine—calling time on that highly-damaging practice to the domestic industry.

In support of the Bill, I can do no better than quote my noble friend Lady Altmann from a recent article in Money Marketing. She wrote:

“UK investment companies have historically been a world-beating success story, offering an excellent way for investors to back sustainable British growth. But this once thriving sector, with over 350 companies quoted on London stock markets and assets exceeding £250bn, is in crisis”.


She concluded:

“It is … galling to see new EU-derived cost disclosure rules, not applied in the EU or any other country”,


undermine

“a once thriving UK financial sector”.

In the words of the noble Lord, Lord Macpherson, the Brexiteers won and have achieved their goal, but they must accept that this is the complete opposite of a Brexit dividend. It is highly damaging to both existing and potential investors, and has been highly damaging to the financial sector. The Bill is an opportunity for my noble friend the Minister to address that, and I hope that she will take that opportunity today.