No-Deal Brexit: Short Positions Against the Pound

Part of the debate – in the House of Commons on 30th September 2019.

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Photo of John Martin McDonnell John Martin McDonnell Shadow Chancellor of the Exchequer

I welcome the hon. Gentleman to his post and congratulate him on his promotion.

The threats by the Prime Minister of taking our country over a no-deal cliff edge have created inevitable uncertainty in the markets, reflected in the varying position of the pound. Uncertainty, as we know, is the breeding ground for speculation. Evidence has mounted of sizeable sums being mobilised to short the pound, betting on sterling falling in the case of a no-deal Brexit. We have heard nothing from the Government until this morning. On the other hand, the former Chancellor has expressed his concern, saying that the Prime Minister

“is backed by speculators who have bet billions on a hard Brexit—and there is only one outcome that works for them: a crash-out no-deal Brexit that sends the currency tumbling and inflation soaring.”

The former permanent secretary to the Treasury, Nick Macpherson, said yesterday,

“Mr Hammond is right to question the political connections of some of the hedge funds with a financial interest in no deal. They are shorting the £
and the country, with the British people the main loser.”

Others will consider that what makes the situation so much worse is not just that we have speculators gambling on our country’s failure and at our country’s expense, but that the Conservative party has been willing to accept donations from those speculators. We are not talking about trivial sums: in this year alone, the Prime Minister and the Conservative party have received £726,000 from individuals who back a no-deal Brexit, many of them involved in hedge funds.

There are questions to be answered. Can the Minister confirm the Government’s estimate of the scale of speculation on the economic outcome of Brexit—placing bets on risks to our economy? Is there not a danger that the promotion of a no-deal scare by the Prime Minister, resulting in profiteering by his friends and donors, could be a seen as a conflict of interest by any standard, and contrary to the ministerial code, which says that Members

“must avoid real or apparent conflicts of interest”?

Should not the Minister who is responsible for overseeing the risks to our economy stand up to the Minister and tell him how inappropriate it is for any candidate for prime ministerial office, or any party, to accept funds from individuals who are speculating on the potentially enormous risks to our economy from no-deal Brexit? Will the Government now support Labour’s proposals for an inquiry into the finance sector, including the regulation of hedge funds and short selling?