Listed Investment Companies (Classification etc) Bill [HL]

Lord Hodgson of Astley Abbotts Excerpts

2nd reading
Friday 15th November 2024 Lords Chamber

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, the hour is late and the sun is setting. The umpire wishes to remove the bails and draw the stumps and then we can all go home, so I will be very brief indeed. I do not want the House to think that such brevity is in any way lessening my support for the powerful case that the noble Baroness just made, and indeed the case made last year by my noble friend Lady Altmann.

The United Kingdom has a very proud record of pioneering innovations in the financial services industry. The investment trust movement, which has been around for over 100 years, is one such. However, only Britain could find itself in a situation where regulations being introduced as part of its membership of a political economic bloc—the PRIIPs regulations—were going to hamstring one of the most important sectors of its financial markets. Even more importantly, having decided to leave that bloc, and having done so on 31 January 2020, nearly five years later we have still not managed to find a way to answer the questions that the noble Baroness has just pointed out in her very powerful speech.

I do not put this down to a lack of political will: I am sure that the Minister would like to sort it out and that her predecessor, my noble friend Lady Penn, equally would have wished to. I put it down to a sort of extraordinary level of institutional inertia, linked to a huge risk aversion, combined at the same time with a very slow process of policy formation—what one might describe as analogue thinking in a digital age.

I am sure that we will hear from the Minister about the forbearance regulation that the FCA brought in. The House needs to understand that that does not go anywhere towards solving the major problem, which is the launch of new trusts. Nobody will take the time and trouble, or go through the expense, of launching a new investment trust if the forbearance regulations might be brought to an end at any time. It is just not getting to the heart of the problem, as the noble Baroness, Lady Bowles, has pointed out.

What is the answer? What can I offer to the Minister as a way forward? Well, she should get hold of today’s copy of the Financial Times, in which the main headline reads as follows:

“Reeves demands City watchdogs allow greater risk in push to promote growth”.


I suggest to my friend the Minister that, when this debate comes to an end, she goes back to her office, picks up the phone, talks to the Chancellor’s office and says to the Chancellor, “Have I got news for you—I have something you can do straight away that will promote growth in a very important part of the UK financial markets”.