Skip to main content

No-deal Brexit: Short Positions against the Pound

Volume 664: debated on Monday 30 September 2019

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on short positions being taken against the pound in the lead-up to a possible no-deal Brexit.

I am grateful to the hon. Gentleman. My advice to the Minister is simply to project. I know he will do so unfailingly.

I will do my best, Mr Speaker. One would not want to be accused of being unduly meek in the circumstances.

We accept the market-based price of sterling and do not have a view on what level this should be. Were the Government to speculate on the value of sterling, it could hurt confidence in our macroeconomic framework. However, as the price of sterling fluctuates in the normal way, Her Majesty’s Treasury believes that investors should be entitled to hedge, including by short selling. The foreign exchange market is a global market, and it is essential that we work with other jurisdictions to ensure a consistent international approach to the oversight of these markets. That is why the UK has supported the work of the Bank for International Settlements to create a single global foreign exchange code, and work is ongoing to ensure that it embeds common standards of good practice in this area.

The United Kingdom will be leaving the European Union on 31 October, whatever the circumstances. We must respect the referendum result. We would prefer to leave with a deal, and we will work in an energetic and determined way to get that better deal done.

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?

The right hon. Gentleman talks about uncertainty, but the only people generating uncertainty in this place are the Opposition. It is they who are selling this country short. They will not vote for a deal, they will not vote for no deal, and they will not vote for a general election. As anyone who talks to British business knows, the main threat to our economy would come from the economic policies we heard set out in Brighton last week.

As I set out in my remarks, the Government’s central position is that we are working to secure a good deal, and the focus of that will be at the summit on 17 and 18 October. That remains our overwhelming focus and our best hope. Clearly, it does not help when the Opposition come together to remove our negotiating leverage in those vital talks.

The right hon. Gentleman referenced the former Chancellor of the Exchequer. I am grateful to the right hon. Member for Runnymede and Weybridge (Mr Hammond) for all the work he did as Chancellor to help prepare for no deal. We have been able to build on that over the last few weeks. I would note, however, when it comes to some of the more outlandish speculation in this area, that Frances Coppola in the Financial Times, in an article entitled, “The Mythical Bets On No-Deal Brexit”, wrote yesterday that this was yet another “tinfoil hat conspiracy theory”. That is about the sum of the merit of this debate.

The Government will not comment on individual positions—no one would expect us to—or the actions of individuals. We do not accept that there is any prospect of a conflict of interest. Insofar as anyone needs standing up to, it is not my right hon. Friend the Prime Minister; it is the right hon. Gentleman, who is making a political and, dare I say it, speculative attempt to throw mud around the House. I did not hear anything in his statement or questions that amounted to a substantive point; they amounted to trying to propagate myths and to smear. In a week when we are trying to lower the temperature in the House, the Opposition seem intent on stoking it. I have nothing further to add.

I congratulate my hon. Friend on his elevation to this important role. While many of us on the Government Benches, and in fact across the House, are concerned about the impact on currency markets of the obvious contradiction between the Benn Act and the Government’s consistent position that we are leaving on 31 October, everybody on the Government Benches is united in the knowledge that the real damage to this country would be done by the Labour party getting any place in government. Every time it makes an announcement, it affects the markets, and that is what gives further uncertainty to this country and that is what would truly damage our economy.

Of course, I entirely agree with my right hon. Friend. We heard the danger set out last week. I thought that the prospect of a three-day week was bad; well, the Opposition have decided to split the difference and have a four-day week. Much of what we heard in Brighton was a recipe for business disaster and the very damage that we need to avoid and which we have spent the last nine years trying to put right.

The pound was shorting at a two-year high in August. The Prime Minister’s sister, Rachel Johnson, has said that people

“have invested billions in shorting the pound or shorting the country in the expectation of a no-deal Brexit.”

The former Chancellor has said that

“there is only one outcome that works for them: a crash-out no-deal Brexit that sends the currency tumbling and inflation soaring.”

Frances Coppola, who the Minister was keen to quote earlier, said that at the very least there was a conflict of interest. The Prime Minister received at least £375,000 from donors associated with hedge funds during his leadership campaign, and we already know from the Jennifer Arcuri case that he is no stranger to conflicts of interest. Will the Minister launch an investigation into this whole affair, because the public need to know what is going on behind the scenes? Will he also accept that those who are already wealthy seem to have everything to gain from a no-deal Brexit but that my constituents and thousands and thousands of others across these islands are still struggling to make ends meet after a decade of austerity and it is they who have everything to lose?

I thank the hon. Lady for her question. We served together on the Treasury Select Committee. She speaks about her constituents. My constituents in Middlesbrough South and East Cleveland could not by any metric be described as wealthy and they enthusiastically support the idea of our delivering on our manifesto commitment—and indeed on the referendum result—to leave the European Union. The Government’s position on no deal is very clear: we want a good deal, a fair deal, that does not leave this country as a rule taker in perpetuity. If we secure a deal, my point, very simply, to the Scottish National party would be: if they want to avoid no deal, they should vote for the deal we bring back.

I congratulate my hon. Friend on his appearance at the Dispatch Box. Does not that limp excuse for an urgent question reveal the contempt the Opposition have for financial markets, which contribute 11% of tax revenue to the Exchequer? Does he agree that the fact that, of the $6.6 trillion of currency dealing done globally, 43% is now done in the City of London—a record high—is a vote of confidence in the City and the way the Government are handling it, and how far does he think the pound would fall if that lot on the Opposition Benches ever got into power?

The pound would need a good head for heights in that scenario. My hon. Friend is absolutely right. The City of London is, of course, one of the great assets of this country and something we should celebrate rather than castigate. It is a source of enormous tax revenue, which underpins our vital public services, and there is no doubt that it is one of the key cards in our hand when it comes to the Brexit negotiations and securing a good deal. So I absolutely agree with him. We sometimes need to do more to talk it up, rather than talking it down.

Is not the implication of the Minister’s first answer that the authorities would allow the currency to fall indefinitely, without intervention, if that is where the market leads?

The Government’s position is that we do not adopt a fixed target for sterling, as clearly we believe that it is sensible for the currency to find its own level in various circumstances. Obviously that freedom for the currency to float is important. Look, all of us in this House believe that the country will succeed in a whole variety of different scenarios. I believe that sterling will find an appropriate level in any scenario, and clearly there are aspects of a fall in sterling that would make it easier to export, so it is not a zero-sum game. We have to trust the market to find its own level.

There is one obvious point, even for people, like me, who are not economists: if we talk down the country and the economy, that is where the economy will go. Thank goodness the Labour party is not in power, because it would destroy the economy.

That is exactly the point I was making, because we need a bit of self-belief in our country. Here we are in the world’s fifth largest economy, and in a country that is widely regarded around the world as a bastion of strength, and we will absolutely succeed in all scenarios. When it comes to Brexit, the Government’s strong preference is to get a deal, but the overwhelming point that people need to hear from this Dispatch Box is that we are leaving the European Union on 31 October, delivering what the people asked us to do, and indeed what most of us in this House were elected specifically on manifestos to deliver.

The Guardian is today reporting that Crispin Odey is shorting house builders and shopping centres, which means that in the event of a no-deal Brexit, when they cannot build homes and more shops close, he will make a packet. Surely the Minister can see that there is a massive conflict of interest, particularly for the Leader of the House, who has been financed by that man for years.

The passion that the hon. Lady shows is certainly a match for what I heard when I was in Bishop Auckland recently to address some of her constituents, because they were very clear that we should be leaving the European Union. I have already said that I do not propose to comment on the actions of individuals, because clearly it is for them to account for their actions. The Government do not take a position on the actions of individuals. We do not take a position on the issue of short selling.

May I welcome the Minister to his post? Does he agree that a sure-fire way of stopping speculators benefiting from a no-deal Brexit would be for the shadow Chancellor and his comrades to vote for the Prime Minister’s deal when he brings it back and to stop no deal in the first place?

I agree with my hon. Friend. Clearly, if we can secure a good deal that is fair to this country, which is our central aim, that is what everyone in the House should get behind, because that will take our country out of the European Union on the smoothest basis—[Interruption.] The hon. Member for West Ham (Lyn Brown) says “Fantasy” from a sedentary position, but what I think is fantasy is the idea that our chances of securing a good deal are improved by continuing to propagate a surrender Act. That is the problem, I am afraid to say, that lies at the heart of this debate. The Opposition are, in essence, trying to take power without responsibility, and it is highly unfortunate and detrimental to this country’s interests if we do not all work together as a nation to deliver on what we, as a country, decided was our future course of action.

Can the Minister confirm that the Government’s own economic assessment shows that a no-deal Brexit would have the most damaging consequences for the British economy, investment, jobs and businesses? As that is the case—[Interruption.] Well, we have all read the assessment produced by the Government. As that is the case, can he explain to the House why he is prepared to contemplate that outcome, given the impact it would have on British business?

The right hon. Gentleman makes a point that we have often debated in the House. We believe on the Government Benches in delivering on the referendum mandate, which was to trigger article 50 and leave the European Union. The operation of article 50 is clear—we leave with a deal if we can secure it, but without a deal if we cannot. The Government have invested billions of pounds in no-deal preparation. Much of that money has been invested subsequent to the November 2018 report, which did not touch on dynamic policy options open to the Government after we leave the European Union. I think in my own region, for example, of free ports. The modelling is not perfect, and does not encompass all the options that are open to us. None the less, as I say, the base case—the Government’s working assumption—is that we will leave the European Union with a deal.

That is what we are working towards. The crucial summit is only three weeks away, and it would help if the House got behind the Government’s efforts to try to secure a sensible deal, take us out and move the country forward. This is the umpteenth debate that we have had in the House on this issue. We go round in circles and do not make progress, because one side of the House refuses to contemplate any sensible way out of this impasse.

I gently remind the House that the thrust of the urgent question relates to short positions being taken against the pound. This is not a general, Second Reading-style debate on the merits or demerits of a no-deal Brexit, of which the House has treated before and doubtless will do so again. It is on the specific matter to which I have just referred, and I feel sure that our hon. Friend from the west country is a noted authority on this matter, on which he is about to expatiate.

Thank you Mr Speaker, you are very kind. It is wonderful to see the Minister in his place, oozing calm and authority, in sharp contrast to the stoking of fears and division on the Opposition Benches. We have just heard about the risk to the economy, but the real risk to the economy is not Brexit nor yet a no-deal Brexit. The real risk is letting the shadow Chancellor anywhere near No. 11 or the Treasury.

I thank my hon. Friend for those kind remarks. It is clear that that would be the ultimate vote of no confidence in the British economy.

Does the Minister not find it ironic that the shadow Chancellor should be concerned about the future value of the pound and the impact on speculation, given that he and his party have spread economic gloom and doom, have talked the economy down, and have proposed lunatic economic policies if ever he should get his hands on the levers of power in this country? Does the Minister agree that the real honeypot for speculators is not our leaving the EU but the prospect of a Labour Government?

I could not agree more strongly with the right hon. Gentleman. Yes, the danger is less our leaving the European Union—it is more the Opposition entering Downing Street.

I congratulate my hon. Friend on his appointment. He is doing brilliantly in his first appearance at the Dispatch Box. He discussed bringing certainty to the markets by delivering Brexit. The main message that I hear from constituents in Harrogate and Knaresborough is that after three and a half years of talking there has been enough talking—why do we not just get on with it? Does he agree with them?

I thank my hon. Friend, who has been a distinguished holder of this office. He is absolutely right. There is in all walks of life a demerit to uncertainty. There is a real problem whereby we marched the country up to the top of the hill in the run-up to 29 March, then had to march down again. We are close to our projected exit date of 31 October. It would be really, really problematic for all those businesses that are making preparations, and in some cases stockpiling provisions as well, to keep going backwards and forwards on this question. The country voted to leave in 2016. It reaffirmed that by voting by over 80% for the two main parties that were committed to delivering on that result in 2017. We need to get on with the job. There would not be anything for people to speculate on if we could achieve certainty in the House.

Over the weekend, I watched “The Big Short”, and I would encourage everyone to watch that film about sub-prime mortgages. In it, there were several hedge funders who made billions from the collapse of the market. They did not care that honest, ordinary Americans lost their homes and jobs. When that happens, when we have a no-deal Brexit and hedge-fund managers make billions, how will the Minister support my constituents, who will be impoverished, and will perhaps lose their jobs and homes? What is he going to do to level the playing field? Actually, it is a question of morality.

I am an historian rather than an economist, but I certainly do not take my lessons on hedge fund activity from Hollywood. We need to be very clear about the fact that there is a real need to provide certainty, and that certainty is hugely important.

Let me say gently—and it is gently—that I did not vote for the deal on the first two occasions when it came forward, for the very reasons that my right hon. Friend the Prime Minister did not do so, namely the concerns about the backstop provisions. Those provisions need to be addressed, and we are working to address them. Fundamentally, we did vote to leave, on a deal or no-deal basis. The hon. Lady’s constituents voted to leave the European Union. [Interruption.] The hon. Member for Stalybridge and Hyde (Jonathan Reynolds) says, from a sedentary position, “Not on a no-deal basis.” I find that my constituents are very clear about the fact that they voted to leave, deal or no deal, and that was very clear at the time.

I congratulate my hon. Friend on his new position. He is truly doing sterling work this afternoon. It will come as no surprise to him to learn that I am fully in favour of well-run and smooth capital markets, from which London is reaping an international reward. Would he care to speculate on what sort of short-selling and sterling damage would be done under the Labour party—given their unfunded tax proposals and their potential sequestration of public assets—and what the market would think of them if they were anywhere close to power, which I pray that they will not be?

My hon. Friend is absolutely right. I am afraid we cannot get around the fact that we are now dealing with something very dangerous in terms of the division between the two parties: the division between economic rationality and a programme that would well-nigh destroy the free-market economy in this country. [Interruption.] Labour Members scoff and sneer, but the reality is that anyone looking at the prognosis from the Labour party conference last week—let alone the trillions of pounds of commitments that Labour is now adding up—will see that it would not only destroy our public finances, but would do massive damage to the competitiveness of British business, on which jobs and homes and mortgages depend.

Does the Minister accept the specific conclusions in the Office for Budget Responsibility’s fiscal risks report? In July, the OBR ran a stress test on a no-deal scenario, on the model of the International Monetary Fund. It predicted that sterling could depreciate by 10% immediately, because

“market participants judge that a fall in the pound is needed to compensate for the reduced competitiveness with the EU… inflation is initially higher, due to the weaker pound”,

which contributes to the UK’s entering “a year-long recession”. Does the Minister accept the OBR’s analysis, or does he believe that this is “a price worth paying”?

What I will say is that I believe we can avoid that scenario entirely if we get a good deal and leave the European Union according to plan, on 31 October. We are very clear about the fact that, in a scenario whereby we cannot get a deal through the House, we will deliver on the referendum mandate and leave the European Union. That is uncontested Government policy. We will ensure that we make the dynamic policy choices that will enable our economy to remain strong, robust and full of opportunity.

Would my hon. Friend care to comment on this splendid irony? Mr George Soros, who in 1992 made a fortune in short positions against the pound, is now one of the bankrollers of the Continuity Remain campaign.

Tempting as it is to follow the trail laid down by my hon. Friend, I will content myself with saying that, just as I would not comment on the actions of individuals in my reply to an Opposition Member, I will not comment on the actions of individuals now. However, the idea that there are vested interests on only one side of the debate could clearly be contested.

One of the areas of the economy that the casino-style hedge funds will be betting against is the housing market. What assessment has the Treasury made of how many fewer homes will be built, and which section of the house building economy will be worst affected: renters, first-time buyers or pensioners?

To the best of my knowledge, we have not commissioned specialist advice on the housing market. If I am incorrect, I will ensure that that is set out in writing to the hon. Lady. It is very clear that the UK housing market is in its most robust condition for many years. Indeed, we are now building many multiples of the situation we inherited in 2009, when house building had well nigh stagnated. Of course, many of the problems faced in our housing market stem from the disastrous failure of the last Labour Government to build enough homes in the first place.

Uncertainty hits not only the London markets but the markets in Edinburgh and elsewhere across the United Kingdom. Does my hon. Friend agree that the best way to end this uncertainty is to vote for a deal, as he did back in March?

I thank my hon. Friend for his question. Yes, I did vote for a deal on 29 March, and I did so because I feared losing Brexit altogether. I think that was a real risk at that point, and it remains a real risk now, thanks to the antics of the Opposition. If only all of Scotland was as well represented as those areas represented by the Scottish Conservatives, who of course have adopted a totally sensible and unifying position, which is that we should get on and deliver, as one country, what our one country voted for.

The economies of the UK were damaged almost irreparably by spivs and speculators in 2008. Have the Government and the Prime Minister learned nothing from that experience, which hit the poorest in our society the worst? This is not about whose policy position is best or worst; this is about transparency, honesty and the Prime Minister’s relationships with these short-changers to society. Will the Minister acknowledge the seriousness of the matter and call an independent investigation into the Prime Minister’s conduct?

Actually, this is about democracy and whether we implement the result of a national referendum in which more than 34 million of our fellow citizens expressed their view. For my part, I intend to honour what they voted for. That is the position of this Government, and I think that view is shared by anybody who understands the damage that preventing our leaving the European Union would do to faith in democracy.

My hon. Friend is doing a great job on the Front Bench, to which we welcome him. This urgent question is deeply partisan and political—we all know that—but it strikes me that our economic growth looks pretty good this year. PwC also predicts pretty good economic growth. Just to negate the nonsense coming from the Opposition, can my hon. Friend tell me how well preparations are going for a no-deal exit?

My hon. Friend is absolutely right: the third quarter figures for the UK economy look very robust. Clearly, there is a lot to be said about the ongoing work to make sure that we are ready for a deal or no-deal scenario. My right hon. Friend the Chancellor delivered the spending review earlier this month and today he will give an excellent speech in Manchester, no thanks to the Opposition, setting out our plans for how we move forward. Clearly, we are deploying billions of pounds and the most robust plans available to make sure that we are ready to thrive in all scenarios.

When the last Conservative Chancellor, a former permanent secretary to the Treasury and the Prime Minister’s own sister blow the whistle, the Minister simply cannot brush aside these most serious claims of a conflict of interest. Some of the Prime Minister’s biggest donors are clearly betting against Britain, and, intentionally or not, the Prime Minister is aiding and abetting them by pursuing a no-deal Brexit. I therefore ask again: will the Government set up an urgent independent investigation?

Does my hon. Friend agree that speculation in the future movements of markets or currencies—some people think they will go up, others that they will go down—is a sign of a healthy free market economy, and that there is no speculation in the direction of travel of the shadow Chancellor’s favoured economic model in Venezuela, where the bolivar continues to crash, which is hardly surprising because inflation there is running at about 1 million per cent. this year?

My hon. Friend puts it with his customary robustness, but he is absolutely right that the real threat to the economy, to the strength of sterling, to our competitiveness and to jobs and living standards across the country would be a series of bad decisions made by a reckless, hard-left Labour Government.

My constituents and the Minister’s constituents are working multiple jobs and long hours to keep themselves afloat. Does he understand at all just how distasteful it is for them to see people making millions betting against our country?

I yield to nobody in my appreciation of how hard people work in the Tees valley and, indeed, how passionate they are about our area, but there is absolutely no doubt in my mind that democracy needs to be honoured. We need to deliver on the referendum result and to get this done. There will no actions for the City to take if we get a good deal across the line and the hon. Lady votes for it.

In June, the Bank of England reported that, thanks to the mitigation and preparation put in place by the Government, any hit to GDP in the event of a no-deal Brexit would be reduced by two and a half percentage points. Will the Minister, whom I welcome to his position, confirm that we have had more preparation since then? That means we should be further protected, meaning these individuals will not make their money.

My hon. Friend is, of course, absolutely right that we are stepping up our preparations to cover all eventualities. That is why we made provision in the spending review, which was designed to ensure that we go into this autumn with the options open to us kept as wide as possible. Of course, it is also why the provisions of the surrender Act, which the Opposition brought forward against the will of this Government, are so unwise.

Does the Minister not understand that my constituents in Bristol West are smart enough to spot the hypocrisy of Members on the Treasury Bench telling us that we should vote for a deal when, first, none exists and, secondly, they did not vote for it last time? Does he not understand that my constituents can also spot the other hypocrisy of criticising people for making uncosted spending assessments mere hours after the Secretary of State for Health and Social Care said he does not know how he will pay for all these hospitals he has promised us? Does the Minister not understand that my constituents can spot all of this?

I struggle to see what all that necessarily has to do with the question before the House, but what is very clear is that most people in Bristol are also smart enough to spot that it would be thoroughly unwise to ignore the result of a democratic referendum.

The best way to stop the speculation and the uncertainty is for the Government to accept there is a majority in this House that will not let a no deal happen and, therefore, if the House does not agree a deal, we will not, in fact, be leaving on 31 October.

In response to an earlier question the Minister said he is more of a historian than an economist, so he might remember that hedge funds were also reported to have taken short positions against the pound during the 2016 referendum. Is he satisfied that the regulation of short selling and hedge funds is adequate?

As I said in my opening statement, the Treasury keeps these issues under review and is always working to ensure that we regulate this area in a way that is appropriate and proportionate.

In the interest of transparency, will the Minister agree to publish details of all call logs and meetings between every Minister and Crispin Odey?

The Government do not comment on meetings with individuals, and the hon. Gentleman would not expect me to do so now.

Is not the shadow Chancellor peddling conspiracy theories about shadowy figures working with the Government to manipulate the economy for personal gain because he is a self-proclaimed Marxist who wants to undermine trust and confidence in how our economy and our country work? [Interruption.] It is no laughing matter, as that is what he is trying to do. There have, in fact, already been two investigations into these wild claims. One, as we heard earlier, by the Financial Times that said this is

“firmly in the realm of conspiracy theories.”

The second investigation was by the independent fact-checking organisation Full Fact, which demolished this crazed nonsense in an article headlined, “We think there’s a big error in that viral article about hedge funds and Brexit”.

Would that all parts of our country were as well served as Dudley is by the hon. Gentleman, who is absolutely right: it is genuinely dispiriting that in the mother of Parliaments we find ourselves debating material that is more fit for the tinfoil hat brigade than for Parliament at a crucial time in our country’s history.

As deputy general secretary of the old Transport and General Workers Union and then Unite, I led the battle against the Kraft takeover of Cadbury. A successful and profitable British icon was taken over by a debt-laden American multinational because the hedge funds bought 31% of the shares and sold Cadbury short. Does the Minister not recognise that there is a potential conflict of interest when we have a Prime Minister prepared to sell Britain short by way of a no-deal Brexit, backed by those who make billions daily out of selling our nation short?

The short selling regulations cover the sale of shares, so that falls within the remit of the existing legislation. Clearly, we all want to see our country thrive and move forward towards a better future. That will be best done by voting for a deal, as of course many of the members of the hon. Gentleman’s former trade union will have done.

I hope the Minister recognises that we are talking not about companies protecting themselves in good faith from the devastating impact of a no-deal Brexit, but about large-scale—industrial—shorting of the pound, that that can drive extreme behaviours, as well as market crashes, and that, at the very least, this needs to be investigated by the Electoral Commission, in order to see what the influence is. But my question to the Minister is simple: does he know the level of exposure to the shorting of the pound?

The Government do not take a view on this issue. [Interruption.] But what is clear is that the hon. Lady can avoid the outcome that she so wants to avoid, by voting for a deal when one is brought forward—that is, and always remains, the case. So we now need to move forward with some purpose, rather than with wild speculation, trying to smear the Government as somehow being in hock to these interests—it is not working. Any rational observer will see that this is not an argument that sustains itself.

The Minister keeps trying to make this about leaving the EU on 31 October or not, but it is all about transparency and conflict of interest. We are talking about hedge fund managers who previously backed the leave campaign and in 2016, after the referendum, made some £350 million overnight. Therefore, £375,000 of backing to the Prime Minister is nothing compared with the billions of pounds these people might make if there is a no-deal crash out. Surely the Minister understands that this is about a conflict of interest and transparency. If he is so confident about the Government’s behaviour, why does he not authorise an investigation?

The hon. Gentleman needs to recognise that our country is absolutely determined to leave the European Union on 31 October. Rather than trying to prevent that, and, in so doing, making no deal more likely, he should get behind the Government’s efforts to secure a good deal.

Let me give the figures some context. Correct me if I am wrong, but I believe that back in 2016 Odey fund management made £300 million on shorting sterling. By contrast, the UK automotive industry has spent £350 million ensuring that it is protected against a no-deal Brexit. Does the Minister not recognise that we are vulnerable in our manufacturing sector—in our heartland communities—to losing jobs and businesses because of the practices of these short sellers? Lord Macpherson, the former permanent secretary to the Treasury, has tweeted:

“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”.

What does the Minister say?

I point to the wise words of the Opposition Deputy Chief Whip in the House of Lords last November, who said that short selling

“is not necessarily the evil practice that the popular press held it to be…It had a role.”—[Official Report, House of Lords, 28 November 2018; Vol. 794, c. 706.]

Short selling may have a role, but not when Government policy deliberately manipulates the currency to provide a big pay-out to individuals who have paid huge amounts of money either to the Conservative party or to individual right hon. Members. That is the problem. Does the Minister not understand that this is not about the Government’s taking a position on currencies? It is about the stink of something that does not seem quite right.

The Minister quotes Frances Coppola, but she also said:

“Many hedge-fund managers see Brexit…as an opportunity from which they obviously hope to profit, and they are positioning their portfolios accordingly”.

She fears that that creates “psychological pressure” on the Prime Minister

“to deliver what his backers want rather than what is in the best interests of the country”.

How can the Minister convince the people of the UK that the Prime Minister has the moral courage to resist that psychological pressure?

The Prime Minister has the moral courage to deliver on the referendum result, take our country forward, deliver what millions of people voted for and make our country a better place to live. If we are going to exchange quotes, let me quote a bit more from the article:

“In short, there is no evidence that the hedge funds that have backed Johnson’s election campaign have ‘millions of pounds’ of speculative bets on no-deal Brexit. They have millions of pounds of speculative bets on UK companies, yes, but that is simply business as usual.”

The reason why this is not business as usual is that we are faced with Government Ministers who have close connections with and financial interest in some of the speculative funds and who are making a decision that would have catastrophic consequences for my constituents and for businesses in my constituency, and there is no transparency as to the closeness of that relationship. It cannot be divorced from what is going on in this place, which is why the Minister needs to agree to the requests for an inquiry. We need to get to the bottom of this.

The Government are doing what they are doing because we believe it is right to leave the European Union on 31 October, as we all promised that we would. That is absolutely what animates our actions; any suggestion to the contrary is not just wrong but offensive.

How does the Minister defend a situation in which anyone who is caught insider gambling deliberately to fix the result of a game of cricket goes to jail, but anyone who is insider gambling deliberately to crash the economy is likely to end up in the House of Lords?

That is a very serious suggestion. I would not recommend that the hon. Gentleman repeat it outside the Chamber.

I welcome the new Minister to his place. Will he clarify the statement he made earlier that the former Chancellor, the right hon. Member for Runnymede and Weybridge (Mr Hammond), is part of the tinfoil hat brigade perpetuating a conspiracy theory in regard to this serious matter?

I have a great deal of admiration for the former Chancellor, but I am clear that in this case he is wrong.

A number of hedge funds expect to benefit as a result of their short positions on a number of sectors in the economy, including construction and shopping centres. It cannot be right that as a deliberate result of Government policy those hedge funds are going to cash in at the expense not only of those sectors but of the constituents of every single Member of this House.

Government policy is to leave the European Union with a deal, if at all possible, and that remains our central case. The hon. Gentleman’s question in many ways summarises the past few minutes, in so far as it does not get to the substantive point, which is that the only reason we are at risk of a no-deal exit is that we have not managed to persuade the Opposition that they should get behind our attempts to secure a better deal rather than seek constantly to undermine them.

Points of order come later. We look forward to them with eager anticipation from the lips of the right hon. Gentleman.