Time for a recap
The UK government has refused to launch an inquiry into its links to financial speculators who are accused of shorting UK assets to profit from a disorderly departure from the EU.
Treasury minister Simon Clarke has tried to rebut claims, from former chancellor Philip Hammond, that Boris Johnson’s hedge fund backers would win “billions of pounds” from a no-deal Brexit.
But several MPs have warned that Boris Johnson faces a conflict of interest, having taken money from investors — who have shorted UK companies and could be speculating heavily against the pound.
Answering an urgent question on Hammond’s allegations, Clarke claimed that such theories were “more fit for the tin-foil-hat brigade”. He insisted that the pound should be free to float, and accused critics of “selling this country short”.
Claims that investors who backed Johnson, or the Leave Campaign, would win billions from the collapse of sterling were simply wrong, Clarke insisted.
And he told several MPs that the best way to avoid a no-deal Brexit was to support efforts to leave with a good deal.
But opposition MPs fear that City speculators are hoping to profit from a disorderly Brexit – as the Treasury’s former top civil servant, Nick Macpherson, has warned. Labour’s Tracey Brabin said it was simply immoral for speculators to profit from the pain and disruption that a no-deal Brexit would cause.
Labour’s shadow chancellor, John McDonnell, said “sizeable funds” were being mobilised to profit from no-deal, and criticised the Conservative Party for accepting large donations from hedge funds.
McDonnell said there was a clear conflict of interest:
The Prime Minister and the Conservative Party have received £726,000 from individuals who back a no-deal Brexit, many involved in hedge funds, in this year alone.”
In response, Clarke accused McDonnell of “throwing mud around” to “smear” the government, and claimed that a Labour government would be a bigger risk to sterling than Brexit.
But Liberal Democrat Sir Ed Davey also demanded an inquiry, saying:
Some of the PM’s biggest donors are clearly betting against Britain, and intentionally or not the prime minister is aiding and abetting them by pursing a no-deal Brexit.
Will the government set up an urgent, independent investigation?
Several MPs quoted Philip Hammond’s claim that “Johnson is backed by speculators who have bet billions on a hard Brexit – and there is only one option that works for them: a crash-out no-deal that sends the currency tumbling and inflation soaring.”
In response, Simon Clarke says that he has great admiration for the former chancellor, but he’s “very clear that in this case he is wrong”. He also insisted that the government doesn’t have a position on individuals shorting sterling.
Earlier, Crispin Odey said it was “absolute rubbish” to say he was backing a no-deal Brexit to profit from shorting companies.
Government won’t hold inquiry into hedge funds speculating on no-deal Brexit – business live – The Guardian