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Concerns first raised by Byline Times about the hedge funds and City backers donating to Boris Johnson were discussed in an Urgent Question in Parliament today.
The Government has unsurprisingly dismissed concerns about Boris Johnson’s hedge fund backers speculating on a ‘no deal’ Brexit as a “tinfoil hat conspiracy”, after the former Chancellor Philip Hammond highlighted the issue at the weekend.
The row over whether hedge funds and City traders backing the Prime Minister could make hundreds of millions of pounds by speculating on a ‘no deal’ Brexit has now reached Parliament, with the Opposition parties, led by Labour, demanding an explanation as to whether such a state of affairs amounts to a conflict of interest or a breach of the ministerial code by Boris Johnson.
The issue was originally exposed by Byline Times, when it revealed that more than two-thirds of Johnson’s leadership campaign donations had come from hedge funds and City traders who could benefit from speculation on a hard Brexit, fixed by Johnson in a ‘do or die’ pledge for 31 October.
Shadow Chancellor John McDonnell told Simon Clarke, the Exchequer Secretary to the Treasury, that there is evidence of sizeable funds being mobilised to bet against sterling, in the case of a ‘no deal’ Brexit, and quoted Philip Hammond who stated in an article in The Times: “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.” McDonnell also cited the support from former Treasury civil servant Nick Macpherson.
He said that the Prime Minister and the Conservative Party had received £726,000 by those connected to the City and backing a ‘no deal’ Brexit, and questioned the appropriateness of “accepting funds from individuals speculating on the potentially enormous risk to our economy of a ‘no deal’ Brexit”.
“Isn’t there a danger that the promotion of a ‘no deal’ scare by the Prime Minister, resulting in profiteering by his friends and donors, could be 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?” the Shadow Chancellor asked.
He put four questions to Clarke:
- What is the scale of the speculation on Brexit?
- Is there a conflict of interest breaching the ministerial code?
- Isn’t it wrong to take money from people who are speculating on a ‘no deal’ Brexit?
- Will the Government support an inquiry into the finance sector, including regulation of hedge funds and short selling?
But, Clarke said that the Government would not be commenting on individual positions and that it “did not accept that there is any prospect of a conflict of interest”. He also stated that the Treasury had no view on the price of sterling and respected the right of hedge funds to speculate as the foreign exchange market is a global market.
MPs from both the SNP and Liberal Democrats backed Labour’s demands for an inquiry.
Clarke refused to consider this and attempted to lay the blame for any future currency speculation on Labour’s “uncosted programme” and plans to nationalise industries leading to a fall in the pound.
He also kept repeating that the only way to sort out the problem was for the opposition parties to back the Government’s decision to leave the EU on 31 October. “We must respect the referendum result. We will prefer to leave with a deal, and we will work in an energetic and determined way to get that better deal done,” he said.