Why This Controversial Investment Trust Deal Has Riled Key Shareholders

Summary

Merryn Talks Money — "Why This Controversial Investment Trust Deal Has Riled Key Shareholders"

Date: November 21, 2025
Host: Merryn Somerset Webb (Bloomberg)
Co-host: John Stepek
Guest: Chris Clothier (Capital Gearing Asset Management)

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Episode Overview

This episode digs deep into a contentious merger proposal between two UK-listed infrastructure investment trusts, HICL Infrastructure (HICL) and The Renewables Infrastructure Group (TRIG). Guest Chris Clothier, who has publicly objected to the deal, explains the structure, shareholder backlash, and broader implications for the UK investment trust sector. The discussion also covers current market sentiment, house prices in London, and looming UK budget rumors.

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Main Discussion: The HICL/TRIG Merger Proposal

Background to the Deal

• Participants: HICL (core infrastructure assets) and TRIG (renewable infrastructure), both managed by InfraRed Partners
• Proposal: Merge the two trusts, combining traditional and renewable-focused portfolios

“There are two infrastructure investment trusts. … The first is HICL, which has been on the market since 2006, a well loved core infrastructure fund. And then there is a second which is TRIG ... Now they're both managed by the same fund manager, Infrared Partners, and they have proposed merging the two vehicles together.”
— Chris Clothier (03:03)

What HICL Owns (Core Infrastructure)

• PFI contracts (hospitals, schools)
• Toll roads
• Water sector investments
• HS1 High Speed Rail concession
  (03:57–04:16)

What TRIG Owns (Renewable Infrastructure)

• Wind farms
• Solar assets
• Increasing presence in battery storage, in the UK and overseas
  (04:22–04:37)

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Why Are Both Trading at a Discount?

• All such trusts are "bond proxies." Rising interest rates have pushed discounts wider.
• Investment trusts out of favor: more sellers than buyers.
• Structural concerns: Unlike open-ended funds, trust share supply is fixed in short term.
• Renewables trusts hit especially hard:
  • UK government’s extraordinary profit levy post-Ukraine invasion.
  • Asset valuations questioned (can't sell at book value).
  • Policy uncertainty: potential retrospective subsidy changes in the UK.
  • Renewables have less predictable returns—exposed to energy prices and weather, higher discount rates now demanded by investors.

“Investors…have come to realize that [renewables] are a less certain proposition and therefore require a higher discount rate.”
— Chris Clothier (06:43)

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Shareholder Anger Over the Merger Structure (07:15–11:10)

Key Grievances:

• Core infrastructure shareholders forced into renewables exposure they never wanted.
  • “If I had wanted to own it, I would have bought it, and I bought something else instead.” (Chris, 08:21)
• NAV-for-NAV basis ignores market realities:
  • HICL at a 22% discount; TRIG at a 33% discount pre-deal
  • HICL holders effectively pay a premium to bail out TRIG
• Trig shareholders can cash out at a 10% discount—far better than market price
  • HICL holders have no such option
• Result: Trig holders “bailed out at the expense of HICL shareholders”

“This deal has destroyed value. … We only own Trig and we're completely delighted because it seems like we're being bailed out at the expense of HICL shareholders.”
— Chris Clothier quoting a client (10:14)

Why Is This Happening?

• InfraRed managers avoid losing management contracts; both trusts’ assets stay in-house.
• Trig facing a likely failed “continuation vote” due to persistent discounts; merger circumvents this.
  • “Continuation vote is almost certain to be triggered next year… If you were a cynic, you would say this transaction means they can avoid that…” (Chris, 11:32)

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What Can Shareholders Do? (12:37–14:10)

• Upcoming votes (December)
• Clothier urges all shareholders (retail and institutional) to contact HICL’s board—every voice counts.
• Actively building a coalition of opposed shareholders

“Being shareholders is a democratic activity. … We would love to hear from you. And even if you like the deal, we'd love to hear from you as well.”
— Chris Clothier (13:16)

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Broader Sector Implications

More Mergers, Votes, and Activism on the Horizon (16:41–17:16)

• Investment trusts sector “in the doldrums”
• Clothier warns: sector-wide actions coming to reduce discounts
• Importance of defending shareholder choice and fair deal structures

“One of the things you might be trying to do here is to try and make sure that any that come after this pay more attention to what shareholders might think.”
— Merryn Somerset Webb (17:06)

Preferred Consolidation: Not All Mergers Are Bad

• Would support NAV-based merger between HICL and another core infrastructure trust (e.g., INPP)
• Reducing supply (mergers, buybacks) necessary for repairing discounts over time

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Scale: Is Bigger Better? (18:16–19:08)

• Merger could move combined trust from FTSE 250 to FTSE 100
• Chris: profile boost isn’t worth sacrificing investment mandate integrity

“My argument would be that… if the aim is to create scale, there are far better mergers out there that could be done.”
— Chris Clothier (18:32)

Some Institutional Investors May Need to Sell

• Example: Australian investor may have to exit because combined portfolio no longer fits their mandate

---

Market Roundup & General Macro Chat

General Market Sentiment (19:20–20:56)

• Recent broad sell-off may be a correction after extended overvaluation
• “Cyclically adjusted PE” in the 99th percentile—forward returns likely modest

“We think that markets are pretty, pretty expensive here.”
— Chris Clothier (20:56)

AI Boom, Depreciation & Capex Concerns (21:01–24:23)

• Discussion of investor nerves around AI capital expenditures
• Recognition that GPU depreciation might be understated—artificially boosting earnings
• Chris was early highlighting the depreciation risk (Praised by John)
  • “All this capital spending—what’s the depreciation going to be on that?”
• Worry: Private credit pouring into AI projects may not see adequate returns; risk of large write-downs

“A huge amount of private credit is being sunk into this great AI CapEx build out… who is left holding the baby when those revenues don't materialize?”
— Chris Clothier (23:06)

London Housing Market Swoon (24:23–26:03)

• Prices in wealthy areas (e.g., Kensington & Chelsea) plummeting
• Double council tax on top bands essentially a “mansion tax”
• Asset taxes dampen values and discourage new building (Merryn’s strong opinion)

Budget Rumors: What Could Change? (26:03–28:03)

• Rumored/floated policies: removal of tax reliefs, possible ISAs cap, changes to capital gains/inheritance tax interaction
• Complexity and voter/admin pushback likely stalling factors

“All these things… they don’t put an admin score next to it. Easy. Really, really hard. And that would come under really, really hard.”
— Merryn Somerset Webb (27:41)

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Notable Quotes & Moments

• Chris Clothier (on the shareholder backlash):
  “We have been actively speaking to retail and institutionals since Monday. We've not come across one [supporter] yet. But that's not to say they don't exist.” (14:10)

• Chris Clothier (on market levels):
  “Historically… [the cyclically adjusted PE] has been a fantastic predictor of long term returns… and we're currently in the 99th percentile.” (20:56)

• Merryn Somerset Webb (on mansion taxes):
  “The worst of all taxes are these taxes on assets because they reduce the price of the assets...” (25:13)

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Timestamps for Key Segments

• Deal Overview and Reaction: 03:03 – 11:10
• Shareholder Action Steps: 12:37 – 14:10
• Wider Investment Trust Sector Trends: 16:41 – 19:08
• Market Macro and AI Discussion: 19:14 – 24:23
• London Housing Market and Taxes: 24:23 – 26:03
• Budget Rumors & Tax Speculation: 26:03 – 28:03

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Tone and Style

The episode is conversational, occasionally wry, and clearly opinionated—particularly about shareholder fairness, market froth, and inefficient or punitive tax policy. Chris Clothier provides the critical voice against the merger; Merryn and John facilitate, add color, and draw broader lessons for listeners navigating investments and uncertain market conditions.

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This summary covers the core content and main takeaways for anyone seeking to understand the controversy over the HICL/TRIG merger, the broader state of UK listed investment trusts, and pertinent market and policy developments.

Transcript

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Bloomberg Audio Studios Podcasts Radio News.

[Marin Mazzantep Webb]

Welcome to the Maranto's Money Market Wrap, where we talk about the biggest moves in the market this week and what is driving them. I hi. Mirazamtep Webb, Editor at Large for Bloomberg UK wealth.

[John Stepik]

And I'm John Stepik, senior reporter and author of the Money Distilled newsletter.

[Marin Mazzantep Webb]

Okay, now John, for this week's chat, you suggested inviting a guest who has come into the London studio. We don't do this very often because of course John and I are so expert. We can talk about absolutely anything anytime. But we do know that a lot of our listeners are very interested in investing in investment trust. There's a big story there this week. So John, who have you asked on.

[John Stepik]

Well, I've asked on the wonderful Chris Clothier of Capital Gearing Asset Management and well, Chris had sort of chatted to Chris earlier this week about this particular deal, and I think it's probably reasonable to say that you guys are not overly enthusiastic about the prospect. Is it what should we get Chris to explain what the actual deal is first?

[Marin Mazzantep Webb]

Yes, absolutely. And we will just say as a starter to this that there's a lot of activity in the investment trust sector at the moment and an awful lot of discussion about activity. So this is about one specific deal, but there is a lot going on. So over to you Chris. Tell us about this deal and why you are so appalled by it, to use your own language.

[Chris Clothier]

Thanks very much, Marin. Thank you John, for having me on. Really appreciate it. And yes, indeed, appalled was the word that we chose to use in our letter to the chairman which we also made public earlier in the week. So what's going on here is that there are two infrastructure investment trusts. The first is HCL, which has been on the market since 2006, a well loved core infrastructure fund. And then there is a second which is Trig, or the Renewables Infrastructure Group, which as the name suggests, invests in renewables infrastructure. Now they're both managed by the same fund manager, Infrared Partners, and they have proposed merging the two vehicles together.

[John Stepik]

And just to double check, see, when you say core infrastructure, Chris, for hcl, what do you mean by that?

[Chris Clothier]

So Hickl owns things like PFI contracts, so hospitals, schools, it owns toll roads, it has an investment in the water sector, which is perhaps not everybody's cup of tea. It owns HS1, which is the high speed rail concession. Those sorts of assets.

[John Stepik]

I saw. It's completely different set of assets. So you're talking about.

Lots of. Yes, core stuff. And then what they're doing is they're merging with this company that basically owns wind farms and solar panels.

[Chris Clothier]

Is that wind farms, solar and increasingly some exposure to battery storage.

Both in the UK and overseas. Yeah, that's correct.

[John Stepik]

Cool.

[Marin Mazzantep Webb]

Okay. And we should start by, before we move on to the measure itself and explaining, if you wouldn't mind, Chris, why these thrusts have both been traded on fairly hefty discounts.

[Chris Clothier]

Sure.

[Marin Mazzantep Webb]

Which of course is the problem.

[Chris Clothier]

Indeed. Indeed. The first thing to say is that these vehicles are all to some extent bond proxies. And so as interest rates have risen, so we've seen the net present value of the cash flows associated with these trusts fall and therefore the prices have fallen then, in addition to which, as I'm sure you guys have talked about lots on this show, the investment trust sector has been somewhat out of favor. And fundamentally you've just got more sellers than buyers and that pushes down prices. And of course, unlike an open ended fund where.

Units are created and redeemed and therefore supply naturally meets demand, that supply of shares in the investment trust sector is, at least in the short term fixed. So that explains the kind of general malaise. But on top of that, renewable infrastructure funds have been really badly hit over the last couple of years and then over the last few weeks. Why is that? Well, in the first instance, shortly after the invasion of Ukraine, the government put in place an extraordinary profit levy which hit renewable power generators particularly hard. Then, more generally, there have been concerns that these vehicles may have overstated their assets because a number of them have had assets for sale and have not been able to realize assets at anything approaching the book value values of them. And then finally, in the last couple of weeks, we've seen these proposals floated by the government to retrospectively change the subsidy regime relating to renewable infrastructure here in the uk and obviously that's just made matters worse. And then of course, the final thing is just that investors have come to realize that the cash flows associated with core infrastructure are really pretty predictable. And so you can have a much greater confidence in those. Firstly, with the renewables funds we've seen, obviously they are affected by the power price and they're affected by variation in wind speed and all of these other things. And so investors, I think, have come to realize that they are a less certain proposition and therefore require a higher discount rate.

[Marin Mazzantep Webb]

Okay, so from what you say already, I think John and I are both thinking, well, why would you merge these two things?

[Chris Clothier]

I would have to agree with you there, but I mean, I'd like to be clear. So we came public, and since we've come public, we have heard from literally dozens of investors, both institutional investors and private investors, who all share our concerns. And essentially, if I were going to summarize them, I guess I'd say the following. The first is that, look, some people may differ in their assessment of renewable infrastructure, and that's absolutely fine. And if they want to buy infrastructure, renewable infrastructure, there are plenty of vehicles that they can go and buy. Some people, by contrast, and we would include ourselves in this, prefer core infrastructure, and they own hcl. And what the investors are absolutely spitting about is that all of a sudden they are being forced by the board through their ownership of Hickel, to buy renewable infrastructure. And they say, if I had wanted to own it, I would have bought it, and I bought something else instead. So that's the first big problem. The second big problem is that because of these issues in the renewable infrastructure space, it was trading on a much wider discount. Trig was trading on a much wider discount than Hickel. So at close of business on Friday afternoon, Hickel was trading on about a 22% discount to its then NAV, and Trig was trading on about a 33. So there was sort of an 11% difference. And I guess you could say that that's the market's best estimate of the difference in hardness, if you will, of their respect. So investors were saying they had much more confidence in the NAV of Hickel, much lower confidence in the NAV of Trig. But the deal has been structured on an NAV for NAV basis. And so what that means is that not only are investors being forced into buying a set of assets that they don't want, because it's being struck on an NAV for NAV basis, they're effectively paying a higher price than the prevailing market price before this deal was announced.

[John Stepik]

Yes. I mean, why not just buy it in the open market?

It seems a bit odd.

[Chris Clothier]

I'm afraid it gets even worse than that, which is that the Trig shareholders are being offered a cash out at a 10% discount for some of their stake. So actually that means that the effective price that Hickel shareholders is even higher. And alternatively, Hickel shareholders aren't being offered any cash out at any price under the terms of cash.

[Marin Mazzantep Webb]

Hang on, so there's for Hickel shareholders, but there is an out for Trig shareholders at a 10% discount to NAV. That's a great deal for them. Absolutely, if it was initially on a 34%. So shareholders in Trigg will be pleased. They might not get out in their entirety, but they'll get out of some of their horrible holding at a 10% discount and the rest will be folded into a superior trust.

[Chris Clothier]

Correct.

[Marin Mazzantep Webb]

This is pretty good for Trig shareholders, assuming they don't mind holding the assets inside Hickl.

[Chris Clothier]

That's a fair comment. And so obviously if I were a Trig shareholder, I'd be reasonably delighted. Although I would note that the difference in share price movements since the deal was announced is quite asymmetric. The share price of Hickel when I last checked, was down 7% from the undisturbed price, but the Trig share price was only up 2. In aggregate, this deal has destroyed value. But actually you're right. I had an email from a client a couple of days ago. I asked him if he was involved in the transaction and he replied saying, for my sins, we only own Trig and we're completely delighted because it seems like we're being bailed out at the expense of HECL shareholders. And I'm afraid I have to agree with him. I was impressed with his honesty.

[Marin Mazzantep Webb]

Yes. Okay, so why do you think this is happening? I mean, the suspicion is that this is just good for the the advisor because they have Both trusts. So they get to hang onto the assets and neither of these trusts end up going anywhere else or they bought out or merged into another trust out with their organization. So it makes sense for them.

[Chris Clothier]

Yeah, and, and I mean and, and particularly in relation to that. So Trigger made a promise that they would hold a continuation vote if the trust traded on a discount. I forget what the number was. I think it was maybe if it averaged wider than a 10 discount over a 12 month period or whatever it was. That continuation vote is almost certain to be triggered next year. If you were a cynic, you would say that this transaction means that they can avoid that continuation vote taking place where given, I guess, the very large discount that it was trading on prior to this announcement, you would think there was a good chance that that continuation vote would fail.

[Marin Mazzantep Webb]

Yeah. So Infrared Capital Partners who have both of these trusts now will effectively keep the majority of the assets in both of them. Yes, which they may well not have otherwise.

[Chris Clothier]

Indeed. And admittedly they have made some concessions around management fees, but they're pretty modest. And so in the grand scheme of things, yeah, I think it's a good deal for Infrared.

[John Stepik]

Interesting. So say someone's listening to this and they own shares in Heckel or Trig for that matter, what can they do to stop the deal going through? Or presumably this is all going to vote at some point. Is that coming up in December? Am I right in thinking that?

[Chris Clothier]

Correct? Yeah. So the documents haven't been published yet, but certainly according to management, the votes will be coming up in December. Look, our advice would be first thing to do for any shareholder, and this is just as true for institutional shareholders as it is for retail shareholders, is to get in touch with the board of hcl. You can find their email address on the Hickel website. And if you tell them that you don't like the deal, by the way, it goes without saying that being shareholders is a democratic activity. If you like the deal, you should also get in touch with them as well and tell them about that. I would hate to, as it were, be told that there were some silent majority that wasn't being listened to in all of this. It's really easy at times like this, both as institution and as retail shareholders, to feel that you're very small and that your voice doesn't count. And what we are trying to do is gather together a group of like minded shareholders who feel the same way about this and make sure that the board are really hearing our voices loud and clear. So it's. We would love to hear from you. And again, even if you like the deal, we'd love to hear from you as well.

[Marin Mazzantep Webb]

That's fair. There may be a lot of people who love this deal outside trick shareholders. There may be others who are perfectly happy for these trusts to be folded together.

[Chris Clothier]

I mean, you're absolutely right, there may be. Merrin we have been actively speaking to retail and institutionals since Monday. We've not come across one yet. But that's not to say they don't exist.

[Marin Mazzantep Webb]

Not to say they don't exist. You never know which way people will go on this Foreign.

[Chris Clothier]

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[Marin Mazzantep Webb]

Can I take the conversation a bit wider and ask you then the investment trust sector in the uk, we were talking about it being genuinely in the doldrums there are likely to be more actions in the sector. Right. Everyone's trying to find a way to get these discounts down. And so there's bound to be more announcements of continuation votes, more mergers from takeovers, et cetera.

[Chris Clothier]

Yeah, I think that'd be a fair assumption.

[Marin Mazzantep Webb]

So one of the things that you might be trying to do here is to try and make sure that any that come after this pay more attention to what more shareholders might think.

[Chris Clothier]

Yeah, absolutely. So there's another core infrastructure fund, impp, that's also held in very high regard by us, certainly, and lots of other market participants. And had this been a proposal to merge IMPP and HCL together on an NAV for NAV basis to create a much larger, more liquid trust, I'm absolutely sure we'd throw our weight behind it and that would be a good thing. When there is, in the investment trust sector, as in any market, a greater supply than demand of shares, one thing takes up the slack, and that is price. And the way to solve that imbalance is to reduce the supply of shares. And so ultimately that is about trusts getting taken over, getting merged, buybacks happening. And obviously in the case of trusts that hold illiquid private assets, that's a longer and slower process than for conventional investment trusts, but it just takes time and just needs to be worked through.

[Marin Mazzantep Webb]

Yeah.

[John Stepik]

Am I right in thinking these two are both FTSE 250 and if they merge, they become FTSE 100?

[Chris Clothier]

I think that's a reasonable assumption. Yeah. They're Both in the FTSE 250. Yeah.

[John Stepik]

So the only other overall benefit is that arguably it becomes a higher profile trust than it currently is. Yeah.

[Chris Clothier]

And I think. I mean, I guess there is definitely some merit to that, but my argument would be is that there's far better. If the aim is to create scale, there are far better mergers out there that could be done. It's also true that scale is not in and of itself a solution. So I was speaking to an institutional investor in Australia who holds Hickel, and they were saying that they were concerned that they would be forced to dispose of their stake in Heckel because of the fact that it would no longer fit with their mandate.

[Marin Mazzantep Webb]

Interesting. Okay, Chris, because we've got you.

And this is a Market Roundup podcast, can I ask you what on earth you think is going on in markets in general at the moment?

[Chris Clothier]

I mean, you absolutely can ask me. I'm afraid my answer, as is so often the case, is that I'm completely baffled.

[Marin Mazzantep Webb]

Which bit baffles you. I mean really, I'm talking about the last four or five days. We've seen constant sell offs across the board and everyone thinks, well maybe this is the beginning of the end of the AI bubble or the AI boom, or maybe it's just because everything is horribly expensive and so it makes sense for it to correct a little bit. I mean if you look at the numbers for year to date, everything's still up 15, 16, 17, 18%. Not really a big deal. Bitcoin is pretty much the only thing that's lost all its gains for the years.

[Chris Clothier]

Well, I certainly think I'd be in the kind of the latter part of your explanation, which is that everything was horribly expensive to start with. And so we're just seeing what might be the start of, as it were, a normal correction. I mean, as I'm sure you know, we set a lot of store by the cyclically adjusted P E ratio. And the reason for that is that historically it's been a fantastic predictor of long term returns. If you bucket starting cape ratio by decile, you see that the prospective 10 year returns correlate perfectly to each of those buckets. The 90th percentile and upwards, historically speaking would point to average prospective real returns of about half a percent per year for the next 10 years. And that's for the top decile and we're currently in the 99th percentile, so we're in the top 1% of that top bucket. So yeah, you know, we think that markets are pretty, pretty expensive here.

[Marin Mazzantep Webb]

So everything has to go absolutely right. Every earnings forecast has to be beaten.

[John Stepik]

We are being a bit hostage to fortune here because Nvidia is coming out later today as we speak. And I guess a lot of it hinges on what happens with that, doesn't it? Although the other things people are starting to freak out about.

They'Re not sure what to panic more about is like, is AI taking over fast enough? And also are people now spending too much money on investing in AI? And I think that's the one thing I do think the mood has shifted. There's no longer this all. We really want you to roll out stuff as fast as possible and really kind of take control of this space. They're now thinking, wait a minute, how are we going to pay for all of this stuff that you're building? And I think that's one kind of narrative tweak that I would say I've noticed maybe in the past two or three months, maybe even not even that long.

[Marin Mazzantep Webb]

Yeah. Is it also fair that this idea that depreciation isn't quite being dealt with correctly is really beginning to take hold. And we talked about this last week, John and I think we both wrote about this idea that the big GPUs, the what are they called, graphics processing units will lose their value faster than people thought, therefore they're being depreciated over the wrong period. And that is artificially inflating earnings numbers. That's something that is, you know, was so niche even a week ago and now is part of the general conversation.

[John Stepik]

Well, interestingly, to give Chris's credit, I remember we had a chat about it about two months ago and the first thing he was saying to me was about yeah, but look at all this capital spending, what's the depreciation going to be on that? And I was like, oh yeah, that's an interesting point. I just wish I'd kind of like listened more closely and written about it at the time.

[Marin Mazzantep Webb]

Chris, you're so ahead of the game. Thank you. Tell us something else that would make the rest of us ahead of the game.

[Chris Clothier]

You know, I tend to only come up with one good idea about every 10, so.

I don't know what I've got next. I mean, I suppose, you know, I think obviously the depreciation point is one thing, I guess the other thing is that a huge amount of private credit is being sunk into this great AI CapEx build out. And of course, admittedly most of these private credit managers are pretty shrewd operators. I mean, I don't think anybody can say that Apollo are naive for instance, but by the same token there is such a wall of money in private credit that needs to be spent and such excitement around AI. And what I struggle to see is that the revenues will be there that will support this huge amount of capex. And so I guess the question is, who is left holding the baby when those revenues don't materialize? Now the Magnificent Seven generate such prodigious amounts of free cash flow that maybe they can just write that off. Just to say Meta wrote off the 50 plus billion dollars that they spent on the metaverse. And essentially I think we all agree that that's turned out to be worth. Investors say, well that doesn't really matter because the core business is fantastic. They'll get some things right, they'll get other things wrong. But it's all equally possible that, you know, a large chunk of this capex ends up in the hands of private debt funds and simply the revenues aren't available to support it. And then you See some really large write downs? I have no idea.

[Marin Mazzantep Webb]

Yeah, okay, well that's that then. I mean I think the cool thing here is expensive stuff doesn't always stay expensive and that's roughly what's happening here before we move on and sorry Chris, this is not, not, not something you're interested in I should think, but I'm very interested in a headline on Bloomberg at the moment that I know John is going to love. House prices crash across London's wealthiest neighborhoods. House prices in Kensington and Chelsea fell by almost £160,000 in the year to September, with the prices of sold homes in the borough dropping 11.3%. And across London as a whole, house values down more than 10,000 pounds each, down around 2% or so. And do you know what's going to make those houses house prices fall even faster?

[John Stepik]

Doubling council tax on the top bands.

[Marin Mazzantep Webb]

It's a merchant tax. It is what they call it a mansion tax and that's what it's going to work being and as after LAUGHTER Only a few weeks ago. The worst of all taxes are these taxes on assets because they reduce the price of the assets or the value of the assets and then they go give you a bit of a reverse wealth effect. Everyone fills the poorer, no one, no one builds a new extension, etc. Etc. They're terrible, terrible taxes.

[John Stepik]

Well, it's a big problem, isn't it? Because people already, like builders no longer feel it's worth building in London because they simply can't get make a profit on what they build.

[Marin Mazzantep Webb]

So although, you know, all this said, everyone keeps telling me that, you know, the reverse wealth effect is in place and no one's building extensions or having work done in the houses anymore. But you know, I've been looking for someone to put a new shower into my basement for a year.

[John Stepik]

Have you? Not living in London. The rest of the country's okay.

[Marin Mazzantep Webb]

Not living in London. Everyone else is fine. Okay, brilliant. And I suppose the only other big story this week that we should look at briefly is the endless discussion about what is going to be in the budget. And RSM very kindly sent us a list of what might be in a smorgasbord budget. I've been working all day on trying to learn to say smorgasbord is a very difficult word for me. Their list includes a few things that I hadn't even thought of actually. The removal of the. I know, removal of the resident no rate.

[John Stepik]

Oh, I said no.

[Marin Mazzantep Webb]

Maybe they would.

[John Stepik]

Maybe they would.

[Marin Mazzantep Webb]

Yeah, maybe they would. That variant it would raise 2.2 billion. The removal of business asset disposal relief, which would raise a mere 0.9 billion. Uplift of removal of the capital gains. Uplift on debt. That's quite unlikely. Or honestly so that you would now have to. You will then have to pay capital gains and then inheritance tax.

[John Stepik]

Because that's a sneaky one.

[Marin Mazzantep Webb]

That's really sneaky.

[John Stepik]

Yeah.

[Marin Mazzantep Webb]

And ISA cap introduction introduced 100,000 pound lifetime cap on Eisran deductions. I mean, that is the.

That would be horrible. Horrible because it runs into all the same things that the lifetime allowance on pensions used to run into, which is, you know, how do you manage that? How do you put inflation into that? Will you change the limit all the time? If you've hit the limit earlier and then they change the limit, you get to put more in Earth. Does it ever work? So I can't really see that one happening. But an interesting list that was one.

[John Stepik]

Of Torsten Bellstaffed ideas at the Resolution Foundation. They've probably just thrown that in on the off chance, but that one does seem like it would cause way too much voter pushback, I think.

[Marin Mazzantep Webb]

Well, it's not that, it's just admin.

[John Stepik]

Well, that too.

[Marin Mazzantep Webb]

All these things. I mean, they should. I don't know, when they think of these things, they don't put an admin score next to it. Easy. Really, really hard. And that would come under really, really hard. Anyway, so that's just some more things for everyone to worry about. We didn't have enough. Yeah. Chris, have you got any thoughts about what would be the worst thing that could possibly happen in the budget?

[Chris Clothier]

How long have you got? I mean, the trouble is that I've got no idea what's going to happen in the budget because they seem to have floated every single trial balloon on the planet and then gone back on half of them. So, I mean, I'm frankly as baffled as anybody, but I completely agree. The simple fact is that the only taxes that really do anything, income tax, national insurance, vat, corporation tax, to a lesser extent, taxes need to go up and frankly they need to just grasp a nettle and get on with raising some of the big taxes.

Inevitably, I would prefer some to others, but just get on with one of them or more than one of them.

[Marin Mazzantep Webb]

Yeah, or put in pace of plan. I mean, outrageous suggestion. Put in place a pan for induced spending over the long term. That would do it for the markets too.

[Chris Clothier]

As unfortunately we have discovered there is clearly no majority in the parliamentary Labour Party to put any kind of constraint on spending. So sadly I don't believe that is going to happen. But yes, that would obviously be a preferred option.

[Marin Mazzantep Webb]

Well, I think we have a consensus on this podcast on that. Right. Anything else John, that we should say, do you think?

[John Stepik]

No, I think that's all been good and we weren't too nasty about Bitcoin, so that's helpful.

[Marin Mazzantep Webb]

We all have our private thoughts on that one. Chris, thank you so much for joining us today. Thanks John.

[John Stepik]

Thanks man.

[Chris Clothier]

Thanks Marin. Thanks John. Lovely to see you both.

[Marin Mazzantep Webb]

You too. Thank you for listening to this week's Marantalk's Money Debrief. If you like us share, rate, review and subscribe wherever you like to podcast. Be sure to follow me and John on X or Twitter erinswnjohnstepec. This episode was produced by Samosadi and Moses andam. Special thanks to Chris Clovia questions and comments on this show and all our shows. Always welcome our show. Email is marinmoneylumberg.net.

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