Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. Welcome to the Marin
Speaker 1: Dogs Money Market Wrap, when we talk about the biggest
Speaker 1: moves in the market this week and what is driving them.
Speaker 1: I'm Arin zum stepweb editor Allows with Bloomberg UK Wealth, and.
Speaker 2: I'm joined Stepbeg, Senior Report an author of the Money
Speaker 2: Distilled newsletter.
Speaker 1: Okay, now, John, for this week's chat. You suggested inviting
Speaker 1: a guest who has come into the London studio. We
Speaker 1: don't do this very often because of course John and
Speaker 1: I are so expert we can talk about it absolutely
Speaker 1: anything anytime, but we do know that a lot of
Speaker 1: our listeners are very interested in investing in investment trust.
Speaker 1: There's a big story there this week. So John, who
Speaker 1: have you asked on.
Speaker 2: Advised on the one focus Cloudier of capital getting asset
Speaker 2: management and I had sort of chatted to Curse the
Speaker 2: earlier this week about this particular deal, and I think
Speaker 2: it's probably the reason what we see the UKs are
Speaker 2: not overly enthusiastic about the prospect once we got to
Speaker 2: explain what the actual deal is fast.
Speaker 1: Yes, absolutely, and we will just as it started to
Speaker 1: this that there's a lot of activity in the Investment
Speaker 1: Trust SECTORHYTHM. I'm down and aul lot of discussion about activity.
Speaker 1: So this is about one specific deal, but there is
Speaker 1: a lot going on. So over to you, Chris, tell
Speaker 1: us about this deal and why you are so appalled
Speaker 1: by it to use your own language.
Speaker 3: Thanks very much, Marion, Thank you John for having me on.
Speaker 3: Really appreciate it. And yes, indeed, appalled was the word
Speaker 3: that we chose to use in our letter to the Chairman,
Speaker 3: which we also made public earlier in the week. So
Speaker 3: what's going on here is that there are two infrastructure
Speaker 3: investment trusts. The first is HICKEL, which has been on
Speaker 3: the market since two thousand and six. It's a well
Speaker 3: loved core infrastructure fund. And then there is a second,
Speaker 3: which is a trig or, the Renewables Infrastructure Group, which
Speaker 3: as the name suggests, invests in renewables infrastructure. And now
Speaker 3: they're both managed by the same fund manager, Infrared Partners,
Speaker 3: and they have proposed merging the two vehicles together.
Speaker 2: And just to double JC when you see core infrastructure,
Speaker 2: Chris for heckle, what do you mean by that?
Speaker 3: So HICKEL owns things like PFI contracts, so hospitals, schools,
Speaker 3: it owns toll roads, it has an investment in the
Speaker 3: water sector, which is perhaps not everybody's cup of tea.
Speaker 3: It owns HS one, which is the high speed rail concession.
Speaker 3: Those sorts of assets I saw.
Speaker 2: It's completely definite set of ices. So you're talking about
Speaker 2: lots of yes, core stuff. And then what they're doing
Speaker 2: is an emerging with this company that basically owns wind
Speaker 2: farms and sol panels.
Speaker 3: Are wind farms, solar and increasingly some exposure to battery
Speaker 3: storage and both in the UK and overseas.
Speaker 1: Yeah, that's correct, Cool, okay, And we should start by
Speaker 1: before we move on to the meursur itself and explaining,
Speaker 1: if you wouln't mind, Christ why these trusts have both
Speaker 1: been trading on fairly hefty discounts. Sure, but of course
Speaker 1: there's the problem.
Speaker 3: Indeed. Indeed, so the first thing to say is that
Speaker 3: these vehicles are all to some extent bond proxies, and
Speaker 3: so as interest rates have risen, so we've seen the
Speaker 3: net present value of the cash flows associated with these
Speaker 3: trusts fall and therefore the prices have fallen. Then, in
Speaker 3: addition to which is I'm sure you guys have talked
Speaker 3: about lots on the show you know, the investment trust
Speaker 3: sector has been somewhat out of favor, and fundamentally you've
Speaker 3: just got more sellers than buyers, and that pushes down prices.
Speaker 3: And of course, unlike an open ended fund, where you know,
Speaker 3: units are created and redeemed and therefore supply naturally meets demand,
Speaker 3: that the supply of shares in the investment trust sector
Speaker 3: is at least in the short term fixed. So that
Speaker 3: explains the kind of general malaise. But on top of that,
Speaker 3: renewable infrastructure funds have been really badly hit over the
Speaker 3: last couple of years, and then over the last few weeks.
Speaker 3: Why is that. Well, in the first instance, shortly after
Speaker 3: the invasion of Ukraine, the government put in place an
Speaker 3: extraordinary profit levy which hit renewable power generators particularly hard. Then,
Speaker 3: more generally, there have been concerns that these vehicles may
Speaker 3: have overstated their assets because a number of them have
Speaker 3: had assets for sale and have not been able to
Speaker 3: realize assets and anything approaching the book values of them.
Speaker 3: And then finally, in the last couple of weeks we've
Speaker 3: seen these proposals floated by the government to retrospectively change
Speaker 3: the subsidy regime. And relating to renewable infrastructure here in
Speaker 3: the UK, and obviously that's just made matters worse. And then,
Speaker 3: of course the final thing is just that there's a
Speaker 3: Investors have come to realize that the cash flows associated
Speaker 3: with core infrastructure are really pretty predictable and so you
Speaker 3: can have a much greater confidence in those. Conversely, with
Speaker 3: the renewables funds we've seen. Obviously, they are affected by
Speaker 3: the power price, and they're affected by variation in wind
Speaker 3: speed and all of these other things, and so investors
Speaker 3: I think have come to realize that they are a
Speaker 3: less certain proposition and therefore require a higher discount rate.
Speaker 1: Okay, so from what you say already, I think John
Speaker 1: and I are both thinking, well, why would you merge
Speaker 1: these two things?
Speaker 3: I would have to agree with you there, but I mean,
Speaker 3: I'd like to be clear. So we came public, and
Speaker 3: since we've come public, we have heard from I mean
Speaker 3: literally dozens of investors, both institutional investors and private investors
Speaker 3: who all share our concerns. And essentially, if I were
Speaker 3: going to summarize them, I guess i'd say the following.
Speaker 3: The first is that, look, some people may differ in
Speaker 3: their assessment of renewable infrastructure, and that's absolutely fine. And
Speaker 3: if they want to buy infrastructure, renewable infrastructure, there are
Speaker 3: plenty of vehicles that they can go and buy. Some people,
Speaker 3: by contrast, and we would include ourselves in this, prefer
Speaker 3: core infrastructure. And they own Hickel. And what the investors
Speaker 3: are absolutely spitting about is that all of a sudden
Speaker 3: they are being forced by the board through their ownership
Speaker 3: of Hickel, to buy renewable infrastructure. And they say, if
Speaker 3: I had wanted to own it, I would have bought it,
Speaker 3: and I bought something else instead. So that's the first
Speaker 3: big problem. The second big problem is that because of
Speaker 3: these issues in the renewable infrastructure space, it was trading
Speaker 3: on a much wider discount. Trigg was trading on a
Speaker 3: much wider discount than Hickel. So a close of business
Speaker 3: on Friday afternoon, Hickel was trading on about a twenty
Speaker 3: two percent discount to its then nav and Trigg was
Speaker 3: trading on about a thirty three So there's sort of
Speaker 3: an eleven percent difference. And I guess you could say
Speaker 3: that that's the market's best estimate of the difference in hardness,
Speaker 3: if you will, of their respective NAV, so investors were
Speaker 3: saying they had much more confidence in the NAV of Hickel,
Speaker 3: much lower confidence in the NAV of Trigg. But the
Speaker 3: deal has been structured on an NAV for NAV basis,
Speaker 3: and so what that means is that not only are
Speaker 3: investors being forced into buying a set of assets that
Speaker 3: they don't want because it's being struck on an NAV
Speaker 3: for NAV basis, they're effectively paying a higher price than
Speaker 3: the prevailing market price before this deal was announced.
Speaker 2: Yes, I mean, why not just buy it in the
Speaker 2: open market, you know, it's kind of it seems a
Speaker 2: bit o white.
Speaker 3: And I mean, I'm afraid it gets even worse than that,
Speaker 3: which is that the Trig shareholders are being offered a
Speaker 3: cash out at a ten percent discount for some of
Speaker 3: their stake. So actually that means that the effective price
Speaker 3: that Hickel shareholders is even higher. And you know, alternatively,
Speaker 3: Hickel shareholders aren't being offered any cash out at any
Speaker 3: price under the term.
Speaker 1: So there's no out for Hickel shareholders, but there isn't
Speaker 1: out for Trig shareholders. At a ten percent discount to NYAVY,
Speaker 1: that's a great deal for them, absolutely, if it was
Speaker 1: initially on a thirty four percent, so shareholders and TRIG
Speaker 1: will be pleased. They might not get out in their entirety,
Speaker 1: but they'll get out of some of their horrible holding
Speaker 1: at a ten percent discount, and the rest will be
Speaker 1: folded into a superior truck. Correct, This is pretty good
Speaker 1: for Trig shareholders, assuming they don't mind holding the assets
Speaker 1: inside hickelds.
Speaker 3: That's a fair comment, and so you know, obviously, if
Speaker 3: I were a Trig shareholder, I'd be reasonably delighted, although
Speaker 3: I would note that the difference in share price movements
Speaker 3: since the deal was announced is quite asymmetric. So the
Speaker 3: share price of Hickel when I last checked was down
Speaker 3: seven percent from the undisturbed price, but the TRIG share
Speaker 3: price was only up too, so in aggregate, this deal
Speaker 3: has destroyed value. But actually you're right. I had an
Speaker 3: email from a client a couple of days ago. I
Speaker 3: asked him if he was involved in the transaction, and
Speaker 3: he replied saying, for my sins, we only own Trig,
Speaker 3: and we're completely delighted because it seems like we're being
Speaker 3: bailed out at the expense of Hickel share and I'm
Speaker 3: afraid I have to agree with him, and I was
Speaker 3: impressed with his honesty.
Speaker 1: Yes, okay, So why do you think this is happening?
Speaker 1: I mean, the suspicion is that this is just good
Speaker 1: for the advisor because they have both trusts, so they
Speaker 1: got to hang onto the assets and neither of these
Speaker 1: trusts end up going anywhere else or being brought out
Speaker 1: or merged into another trust out with their organization, so
Speaker 1: it makes sense for them.
Speaker 3: Yeah, And I mean, and particularly in relation to that, so,
Speaker 3: Trigg made a promise that they would hold a continuation
Speaker 3: vote if the trust traded on a discount. You know,
Speaker 3: I forget what the number was. I think it was
Speaker 3: maybe if it averaged a wider than a ten discount
Speaker 3: over twelve month period or whatever it was. And that
Speaker 3: continuation vote is almost certain to be triggered next year.
Speaker 3: And so you know, if you were a cynic, you
Speaker 3: would say that this transaction means that they can avoid
Speaker 3: that continuation vote taking place, where given I guess the
Speaker 3: very large discount that it was trading on prior to
Speaker 3: this announcement, you would think there was a good chance
Speaker 3: that that continuation vote would fail.
Speaker 1: Yeah. So, and for Red Capital Partners, who have both
Speaker 1: of these trusts now will effectively keep the majority of
Speaker 1: the assets in both of them. Yes, well they may
Speaker 1: well not have otherwise.
Speaker 3: Indeed, and you know, admittedly they have made some concessions
Speaker 3: around management fees, but they're pretty modest and so in
Speaker 3: the grand scheme of things, Yeah, I think it's a
Speaker 3: good deal for Infrared.
Speaker 2: Of interesting to see someone's listening to this and the
Speaker 2: rain shields in Hickel. What or check for that mate?
Speaker 2: What can they do to stop the deal going through?
Speaker 2: Or presumably this is all going to a vote at
Speaker 2: some points that come up in December, and I think
Speaker 2: that correct.
Speaker 3: Yeah, so so you know, we've not the documents haven't
Speaker 3: been published yet, but certainly according to management, the vote
Speaker 3: we'll be coming up in December. Look, our advice would
Speaker 3: be first thing to do for any shareholder, and this
Speaker 3: is just as true for institutional shareholders as it is
Speaker 3: for retail shareholders, is to get in touch with the
Speaker 3: board of Hickel. You can find their email address on
Speaker 3: the Hickel website. And if you tell them that you
Speaker 3: don't like the deal. By the way, you know, it
Speaker 3: goes without saying that being shareholders is a democratic activity.
Speaker 3: If you like the deal. You should also get in
Speaker 3: touch with them as well and tell them about that.
Speaker 3: I would hate to, as it were, be told that
Speaker 3: there were some silent majority that wasn't being listened to
Speaker 3: in all of this. It's really easy at times like this,
Speaker 3: both as institutional and as retail shareholders, to feel that
Speaker 3: you're you know that you're very small, and that your
Speaker 3: voice doesn't count. And what we are trying to do
Speaker 3: is gather together a group of like minded shareholders who
Speaker 3: feel the same way about this and make sure that
Speaker 3: the board are really hearing our voices loud and clear.
Speaker 3: So we would love to hear from you. And again,
Speaker 3: even if you like the deal, we'd love to hear
Speaker 3: from you as well.
Speaker 1: That's it. There may be a lot of people who
Speaker 1: love this deal outside trick shareholders. There maybe others who
Speaker 1: are perfectly happy these trust to be fulled together.
Speaker 3: I mean, you're absolutely right, there may be Mariren. We
Speaker 3: have been actively speaking to retail and institutionals since Monday.
Speaker 3: We've not come across one yet, but that's not to
Speaker 3: say they don't exist.
Speaker 1: Not to say they don't exist. You never know which
Speaker 1: may people will go on this. Can I take the
Speaker 1: conversation a bit wider and ask you then the investment
Speaker 1: trust sector in the UK we're talking about it being
Speaker 1: genuinely in the doldrooms. There are likely to be more
Speaker 1: actions in the sector, right everyone. Everyone's trying to find
Speaker 1: a way to get these discounts down, and so there's
Speaker 1: bound to be more announcements of continuous and votes, more
Speaker 1: mergers from takeovers etc.
Speaker 3: Yeah, I think that would be a fair assumption.
Speaker 1: So one of the things that you might be trying
Speaker 1: to do here is to try and make sure that
Speaker 1: any that come after this pay more attention to what
Speaker 1: more shareholders might think.
Speaker 3: Yeah. Absolutely. So there's another core infrastructure fund I MPP
Speaker 3: that's also held in very high regard by US certainly
Speaker 3: and lots of other market participants. And had this been
Speaker 3: a proposal to merge IMPP and Hickel together on an
Speaker 3: NAV for an av basis to create a much larger,
Speaker 3: more liquid trust, I'm absolutely sure we throw our weight
Speaker 3: behind it, and that would be a good thing. When
Speaker 3: there is in the investment trust sector, as in any market,
Speaker 3: a greater supply than demand of shares, one thing takes
Speaker 3: up the slack, and that is price and the way
Speaker 3: to solve that imbalance is to reduce the supply of shares,
Speaker 3: and so ultimately that is about trust getting taken over,
Speaker 3: getting merged buybacks happening. And obviously in the case of
Speaker 3: trusts that hold a liquid private assets, that's a longer
Speaker 3: and slower process than for conventional investment trusts. But it
Speaker 3: just takes time and just needs to be worked through.
Speaker 2: Yeah, and I'm thinking these two two fifty and if
Speaker 2: they mail just to become fifty one hundred.
Speaker 3: I think that's a reasonable assumption. Yeah, they're both in
Speaker 3: the footsy two fifty.
Speaker 1: Yeah.
Speaker 2: So yeah, so the only other overall benefit is that
Speaker 2: I'll give it becomes a higher profil trust than it
Speaker 2: currently is.
Speaker 3: Yeah, and I think, I mean, you know, and I
Speaker 3: guess there is definitely some merit to that, But my
Speaker 3: argument would be is that there is far better If
Speaker 3: the aim is to create scale, there are far better
Speaker 3: mergers out there that could be done. It's also true
Speaker 3: that scale is not in and of itself a solutions.
Speaker 3: So I was speaking to an institutional investor in Australia
Speaker 3: who holds Hickel, and they were saying that they were
Speaker 3: concerned that they would be forced to dispose of their
Speaker 3: stake in Hickel because of the fact that it would
Speaker 3: no longer fit with their mandate.
Speaker 1: Yep. Interesting, Okay, Chris, Because we've got you and this
Speaker 1: is a market round up podcast, can I ask you
Speaker 1: what on earth do you think is going on in
Speaker 1: muggers in general at the moment?
Speaker 3: I mean, you absolutely can ask me. I'm afraid my answer,
Speaker 3: as is so often the case, is that I'm completely baffled.
Speaker 1: Which bit babbles. I mean, really, I'm talking about the
Speaker 1: last four or five days, we've seen constant sell offs
Speaker 1: across the board, and everyone thinks, well, maybe this is
Speaker 1: the beginning, the beginning of the end of the AI
Speaker 1: bubble or the eye boom, or maybe it's because everything
Speaker 1: is horribly expensive and so it makes sense for it
Speaker 1: to correct a little bit. I mean, if you look
Speaker 1: at the numbers for year to date, everything's still out
Speaker 1: of fifteen, sixteen, seventeen, eighteen percent. Not really a big deal.
Speaker 1: Bitcoin is pretty much the only thing that's lost all
Speaker 1: its games for the year.
Speaker 3: Well, I certainly think i'd be in the kind of
Speaker 3: the latter part of your explanation, which is that everything
Speaker 3: was horribly expensive to start with, and so we're just
Speaker 3: saying what might be the start of, as it were,
Speaker 3: a normal correction. I mean, you know, as I'm sure
Speaker 3: you know. You know, we set a lot of store
Speaker 3: by the cyclically adjusted PE ratio and the reason for
Speaker 3: that is that historically it's been a fantastic predictor of
Speaker 3: long term returns. If you bucket starting CAPE ratio by decile,
Speaker 3: you see that the prospective tenure return correlate perfectly to
Speaker 3: each of those buckets. The ninetieth percentile and upwards, historically speaking,
Speaker 3: would point to average perspective real returns of about half
Speaker 3: a percent per year for the next ten years. And
Speaker 3: that's for the top death style. And we're currently in
Speaker 3: the ninety ninth percentile, so we're in the top one
Speaker 3: percent of that top bucket. So yeah, you know, we
Speaker 3: think that markets are pretty pretty expensive here.
Speaker 1: So everything has to go absolutely right. Every earning forecast
Speaker 1: has to be beaten.
Speaker 2: We are being a bit hostage to fortune here because
Speaker 2: the video is coming out later as we speak, and
Speaker 2: I guess a lot of it hinjies on what happens,
Speaker 2: but that doesn't it a lot of the other things
Speaker 2: people are starting to freak out about. Then they're not
Speaker 2: sure what to planing more about is the ISYI taking
Speaker 2: over fast enough? And also our people now spending too
Speaker 2: much money or investing in AI. Think that's the one thing.
Speaker 2: I do think the mood has shifted. There's no longer
Speaker 2: this obviously want you to roll out stuff as fast
Speaker 2: as possible and really kind of take control of this space.
Speaker 2: They're now thinking, we are we going to pay for
Speaker 2: all of this stuff that you're building. And I think
Speaker 2: that's one kind of narrative tweak that I would say
Speaker 2: I've noticed maybe in the past two or three months,
Speaker 2: maybe even not even that long.
Speaker 1: Yeah, is it also fair that this idea that depreciation
Speaker 1: isn't quite being dealt with correctly is really beginning to
Speaker 1: take hold? And we talked about this last week, John
Speaker 1: and I think we both wrote about it, and that
Speaker 1: this idea that the big GP is the probably called
Speaker 1: graphics processing units and will lease their value faster than
Speaker 1: people thought. Therefore they're being depreciated over the wrong period,
Speaker 1: and that is artificially inflating earnings numbers. That's something that
Speaker 1: is you know, we're so niche even a week ago
Speaker 1: and now is part of the general conversation.
Speaker 2: Right interestingly, you give Chris's creator. I remember we had
Speaker 2: a chat about about two months ago, and the first
Speaker 2: thing have you seen me was a bit yeah, but
Speaker 2: look at all this they'll spend, and what's the depreciation
Speaker 2: going to be on that? I was like, oh, yeah,
Speaker 2: that's an interesting point. I just wish i'd kind of
Speaker 2: like listen more closely and written the.
Speaker 3: Boot tame.
Speaker 1: Christ Is. So I ahead of the game. Thank you?
Speaker 1: Tell us something else that would make the rest of
Speaker 1: us again.
Speaker 3: You know, I tend to only come up with one
Speaker 3: good idea about every about every ten, So I don't know,
Speaker 3: I don't I don't know what what I've got next.
Speaker 3: I mean, I suppose, you know, I think obviously the
Speaker 3: depreciation point is one thing. I guess. The other thing
Speaker 3: is that a huge amount of private credit is being
Speaker 3: sunk into this great AI Capex build out. And of course,
Speaker 3: you know, Missily, most of these private credit managers are
Speaker 3: pretty shrewd operators. I mean, I don't think anybody can
Speaker 3: say that Apollo Naive, for instance. But by the same token,
Speaker 3: there is such a wall of money in private credit
Speaker 3: that needs to be spent, and such excitement around AI.
Speaker 3: What I struggle to see is that the revenues will
Speaker 3: be there that will support this huge amount of capex,
Speaker 3: And so I guess the question is is who is
Speaker 3: left holding the baby? And when those revenues don't materialize. Now,
Speaker 3: the you know, the Magnificent Seven, generate such prodigious amounts
Speaker 3: of free cash flow that maybe you know that they
Speaker 3: can just write that off. Just to say, Meta wrote
Speaker 3: off the fifty plus billion dollars that they spent on
Speaker 3: the metaverse, and you know, essentially, I think we all
Speaker 3: agree that that's turned out to be worthless. But investors say, well,
Speaker 3: that doesn't really matter because the core business is fantastic.
Speaker 3: They'll get some things right, they'll get other things wrong,
Speaker 3: but it's all equally possible that, you know, a large
Speaker 3: chunk of this capex ends up in the hands of
Speaker 3: private debt funds and simply the revenues aren't available to
Speaker 3: support it, and then you see some really large write downs.
Speaker 3: But I have no idea.
Speaker 1: Yeah, okay, well that's that said. I mean, I think
Speaker 1: the core thing here is expensive. Stuff doesn't was so expensive,
Speaker 1: and that's roughly what's happening here before we move on,
Speaker 1: And sorry, Chris, this is not something you're interested in
Speaker 1: I should think that I'm very interested in a headline
Speaker 1: on Bloomberg at the moment that I know John is
Speaker 1: gonna love. House prices crash across London's wealthiest neighborhoods. House
Speaker 1: prices in Kensington and Chelsea felt by almost one hundred
Speaker 1: and sixty thousand pounds in the year to September, with
Speaker 1: the prices of saltoms in the borough dropping eleven point
Speaker 1: three percent, and across London as a whole, house values
Speaker 1: down more than ten thousand pounds each, down around two
Speaker 1: percent or so. And do you know what's going to
Speaker 1: make those houses house prices fall even faster?
Speaker 2: Double in consal tax on the top bynes.
Speaker 1: It's a mentioned tax. It is what they call it
Speaker 1: a mansion tax. And that's what it's going to work being.
Speaker 1: And as after laugh, that was only a few weeks ago.
Speaker 1: The worst of all taxes are these taxes on assets,
Speaker 1: because they reduce the price of the assets or the
Speaker 1: value of the assets, and then they go give you
Speaker 1: a bit of a reverse wealth of fact, everyone feels poorer,
Speaker 1: no one, no one built a new extension, etcetera. Eccent.
Speaker 1: They're terrible, terrible taxes.
Speaker 2: Well, It's a big problem, isn't it, Because people already
Speaker 2: like builders no longer feel its poss building in London
Speaker 2: because they simply can't make a profit on what they build.
Speaker 1: So, although you know all this said, everyone keeps telling
Speaker 1: me that, you know, the river's wealth of factor is
Speaker 1: in place, and no one's building extensions or having worked
Speaker 1: done in the houses anymore. But you know, I've been
Speaker 1: looking for someone to put a new shower into my basement, breed.
Speaker 2: Have you not living in London the rest of the countries?
Speaker 1: Okay, not living in LODs is fine, Okay, brilliant. And
Speaker 1: I suppose the only other big story this week that
Speaker 1: we should look at briefly is the endless discussion about
Speaker 1: what is going to be in the budget. And RSM
Speaker 1: are very kindly sent us a list of what might
Speaker 1: be in a smagas Board budget. I've been working all
Speaker 1: day and trying to learn to say smorgat board is
Speaker 1: a very difficult word for me. Their list includes a
Speaker 1: few things that I hadn't even thought of. Anything the
Speaker 1: removal of the I know, remove all of the residents.
Speaker 2: Maybe the routes, Maybe the routes, Yeah.
Speaker 1: Maybe they would that around you would raise two point
Speaker 1: two billion, the removal of business asset disposal relief, which
Speaker 1: would raise a mayor zero point nine billion uplift of
Speaker 1: removal of the capital gains uplift on death, that's quite
Speaker 1: a likely so that you now have do you will
Speaker 1: then have to pay capital gains and then inheritance facts.
Speaker 2: So that's a sneaky one.
Speaker 1: That's really sneaky. Yeah, And I say cap introduction introduced
Speaker 1: one hundred thousand pounds lifetime cap on I for introductions.
Speaker 1: I mean that is the that would be horrible, horrible
Speaker 1: because it runs into all the same things that the
Speaker 1: lifetime allowance on penance used to run into, which is,
Speaker 1: you know, how do you manage that? How do you
Speaker 1: put inflation into that? Would you change the limit all
Speaker 1: the time? If you hit the limit earlier and then
Speaker 1: they changed the limits, you get to put more on earth?
Speaker 1: Does it ever work? So I can't really see that
Speaker 1: one happening. But interesting lest.
Speaker 2: I was one of the tossed and by all staff
Speaker 2: ideas that the resolution thing. They've probably just thrown that
Speaker 2: in on the off channel. But at that point does
Speaker 2: seem like it would cause way too much for a pushback.
Speaker 1: I think it's not that it's just all too all
Speaker 1: these things. I mean, they should I don't know when
Speaker 1: they when they think of these things, they don't put
Speaker 1: an ADMIN score next to it. I easy, really really hard,
Speaker 1: and that would come under really really hard anyway. So
Speaker 1: that's just a similar things for everyone to worry about.
Speaker 1: I didn't have enough. Yeah, Chris, have you got any
Speaker 1: thoughts about what what would be the worst thing that
Speaker 1: could possibly happen in the budget?
Speaker 3: Long if you go? I mean, I mean the troublers
Speaker 3: that I've got no idea what's going to happen in
Speaker 3: the budget because they seem to have floated every single
Speaker 3: trial balloon on the on the planet and then gone
Speaker 3: back on half of them. So I mean, I'm frankly
Speaker 3: as baffled as anybody, but I completely agree. The simple
Speaker 3: fact is is that you know, the only taxes that
Speaker 3: really do anything income tax, national insurance VAT, corporation tax
Speaker 3: to a lesser extent, and taxes need to go up,
Speaker 3: and frankly, they need to just grasp a nettle and
Speaker 3: get on with raising some of the big taxes. And
Speaker 3: you know, inevitably I would prefer some to others, but
Speaker 3: but just get on with one of them or more
Speaker 3: than one of them.
Speaker 1: Yeah, all put and pays a plan. I mean, you know,
Speaker 1: outrageous suggestion put in plays a pan for spending over
Speaker 1: the long term. That would do over the markets too.
Speaker 3: As unfortunately we have discovered there is clearly no majority
Speaker 3: in the Parliamentary Labor Party to put any kind of
Speaker 3: constraint on on spending. So sadly, I don't believe that
Speaker 3: is going to happen, but yes, that would obviously be
Speaker 3: a preferred option.
Speaker 1: Well, I think we have a consensus on this podcast
Speaker 1: on that, right, anything else John that we should say,
Speaker 1: do you think no?
Speaker 2: I think that's that's all been That's all been good,
Speaker 2: And we went to nicety and bitcoins, so that's that's helpful.
Speaker 1: We all have our private thoughts on that one. Chris,
Speaker 1: thank you so much for joining us today.
Speaker 3: Thanks John, Thanks Maren, Thanks John. Love to say to
Speaker 3: see both you too.
Speaker 1: Thank you for listening to this week's Maren Dog's Money Debrief.
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Speaker 1: Step Back. This episode was produced by Samasadi and Moses
Speaker 1: and Betel. Thanks to Chris Clovia. Questions and comments on
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Speaker 1: email is merin Money at Bloomberg dot net