Autumn Budget 2025

Lord Hodgson of Astley Abbotts Excerpts

Thursday 4th December 2025 Lords Chamber

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, it is a pleasure to follow the noble Lord, Lord Tyrie, with whom I have made common cause on a number of issues—most notably, the evils of extraordinary rendition.

In my four minutes, I want to raise two points. The first is the strategic choices the Government have made in this Budget and how that is going to set the tone for the country’s economic performance over the rest of this Parliament. Secondly, picking up the point made by my noble friend Lord Saatchi, I will say a word on tax.

If you talk to experts about tax—I do not just mean economic experts but sociologists and so on—they will tell you that an ideal tax needs to have a clear purpose, be simple to understand and universal in its impact, raise a sufficiently large amount of money immediately to off-set the frictional costs of its introduction, and be progressive and fall more heavily on broader shoulders. Amid all the ferocious pitch-rolling before the Budget was announced, I thought I heard the Chancellor prepare to undertake an action of considerable personal, political and economic courage by raising income tax. That, as my noble friend Lord Tyrie said, would be simple and straightforward, and it meets almost all the tests that I have just outlined. However, it was not to be. Instead, we have ended up with a smorgasbord. This has broken nearly every one of those golden rules. Indeed, the Minister was good enough to say that it was regressive as far as the thresholds were concerned, though he did not say what my noble friend Lady Neville-Rolfe said—that there will be no money coming from it for several years to come.

As many other noble Lords have said, this is a strange policy choice for a Government and a party who pride themselves on claiming to be in favour of the working man. Instead, the Government fell into the trap of believing, as they say, that they can make all sad hearts glad by making a raft of changes to assuage different groups of recalcitrant Back-Benchers, a policy that is bound to fail. It was said, “Don’t offend this lot, don’t alienate that lot, and eventually you become a vaporous, borderless blur—a grey mush impossible to understand or even defend”. That quote is not from me and not from a Tory commentator, but from Andrew Marr, who is not a friend of the Conservative Party, writing in the New Statesman about this Budget.

This takes me to my second and final point, which is about the dog that did not bark: the failure in the Budget to address in any serious way the conflict between guns and butter. For 80 years, and certainly the last 40 years, we have lived comfortably under the American umbrella, and we have been able to eat a lot of butter. That umbrella is now being withdrawn and slowly dismantled, and we will have to take more responsibility for ourselves. At the same time, behind that, we as a medium-sized power can expect to be caught in the backwash of the shifting tectonic plates as the struggle between the US and China as to who will lead the world in the second half of this century intensifies. Nowhere in that Budget speech did I see any recognition of this strategic challenge. There was certainly no suggestion that we might have to draw in our belts a notch or two to provide funds to address it.

I conclude with a Russian proverb that the Government could study with advantage:

“Better bread with water than cake with trouble”.


This is a cake budget, and we are going to have some trouble.

Gilt Yields

Lord Hodgson of Astley Abbotts Excerpts

Tuesday 2nd September 2025 Lords Chamber

[Lord Livermore (Lab)]

As the noble Baroness knows, the Government do not comment on specific financial market movements, but it is very clear that we have created space for the Bank of England to cut interest rates five times since the election. That will absolutely help those people taking out a mortgage.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, in his reply to my noble friend Lady Neville-Rolfe, the Minister did not refer to the question of index-linked gilts. Will he confirm to the House that 30% of the gilts outstanding are index linked, and that therefore this country is inevitably now much more vulnerable to swings in interest rates?

[Lord Livermore (Lab)]

As I have said before, the Government do not comment on specific financial market movements.

Listed Investment Companies (Classification etc) Bill [HL]

Lord Hodgson of Astley Abbotts Excerpts

3rd reading
Friday 13th December 2024 Lords Chamber

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I wish to make a few thanks and remarks, but first I must declare my interest as a director of the London Stock Exchange and as a long-term investor in listed investment companies. I thank everyone involved in the drafting and discussions of this Bill, including the Minister—the noble Lord, Lord Livermore—who has been supportive on the issue, all noble Lords who have supported the Bill during its progress, the Public Bill Office, Nigel Farr of HSF, the AIC, many industry specialists who have contributed to the drafting, and consumer organisations such as Which? and ShareSoc which support the Bill and the wider cost disclosure campaign. I also thank journalists who have put the issue in the public eye. The noble Baroness, Lady Altmann, who is unable to be in her place today as she is recovering from a shoulder operation, trod a similar path with her Bill in the previous Session and has stood with me on this issue through many a debate and meeting. I also thank in advance the honourable Member for Hazel Grove, Lisa Smart, who is sponsoring this Bill in the other place.

Yesterday was the deadline for submission to the Treasury’s call for evidence on growth and competitiveness in financial services. I cannot help but say that it seems peculiar to be hunting for changes to promote growth when there is low-hanging fruit available to end the market disruption for listed investment companies that has resulted in more than £20 billion and counting of lost investment in the UK economy over the past two years. HMT or the FCA could lean on platforms and the Investment Association to get fully behind the changes for listed investment companies made by the legislative actions and forbearance in September. Instead, it seems they await the slow turning of the handle of consultation on, rule-making for and embedding the entire PRIIP legislation, which will take well into 2027 with tens of billions more pounds of lost investment in UK infrastructure.

By way of help, the chair of the FCA did finally confirm to the Lords Financial Services Regulation Committee on 13 November that, for listed investment companies,

“ongoing charges are not deducted from the share price”,

and that,

“as a fact, there is not a deduction from the share price”.

Yet platforms such as Hargreaves Lansdown still insist that a misleading disclosure about cost deductions from the investor must be entered or they will block retail purchase. I am told that they claim that they are urged to do so by the Investment Association, which is the association for the dominant open-ended fund sector, not for listed investment companies. The open sector is a sector that may relish scooping up some of the lost equity investment for itself but, make no mistake, it cannot replace the lost billions in social and environmental infrastructure. While this regrettable situation continues, I believe this Bill still has an important role to play.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I shall say a word in support of the noble Baroness, Lady Bowles, before we wave this Bill goodbye. The investment trust movement is a proven success story in this country but has been uniquely caught up in the PRIIP regulations. For three or four years we have been trying to find a way through that thicket.

I appreciate that the noble Lord, Lord Livermore, and the Government have produced some temporary forbearance regulations that are now in effect, but that is only a quarter of a loaf. To rebuild the sector, we need new investment trusts, but no one will launch investment trusts with only temporary relief that might at any moment be withdrawn. Therefore, while of course the industry is grateful to the Government for what they have done, it is only a sticking plaster.

The worrying aspect is that, now that we have forbearance relief, there will be no pressure on the regulators to make their mind up and the hitherto glacial progress will proceed even more slowly. I hope the Minister might take the noble Baroness’s Bill, stick it in his back pocket and say, “It has no commencement date but, if you don’t get on and sort your mind out, we’ll put a commencement date on it and bring it in”.

[The Earl of Effingham (Con)]

My Lords, I thank the noble Baroness, Lady Bowles of Berkhamsted, who has argued so cogently and cohesively for the Bill.

Finding ourselves in this position appears to be a mistake, and it is essential that we take the right steps to ensure that disclosures relating to closed-end listed investment companies are presented accurately. This is not merely a point of minute detail. As the noble Baroness has argued so diligently, the current situation has led to the loss of tens of billions of pounds of potential investments, resulting in economic damage to our country.

The Government tell us repeatedly that they want growth, and therefore the British people expect them to take the right steps to foster that growth. Indeed, as the Minister highlighted at Second Reading, EU-derived legislation related to retail disclosure is not fit for UK markets. We understand that the Government have committed to making changes to address and resolve these issues, and His Majesty’s Official Opposition greatly hope that the Government will continue to listen to the noble Baroness in a co-ordinated and collaborative effort to foster the growth that is essential if we are to deliver optimal outcomes for everyone across the country.