Covid-19: Businesses and the Private Sector

Lord Purvis of Tweed Excerpts

Thursday 21st May 2020 Lords Chamber

[Lord Purvis of Tweed (LD)]

I thank the noble Lord, Lord Dobbs, for the debate, and I very much share the sentiments of the noble Lord, Lord Blunkett. We know there will be very serious long-term consequences for many sectors in the UK economy beyond this immediate shock. For example, the Chancellor has already indicated that the self-employed will be likely to pay higher taxes and national insurance contributions next year, while businesses in Northern Ireland will have greater trade barriers because they were misled by the Government. Those are just two examples.

On a wider scale, we know from analysis in the FT that the UK is being and will be impacted greater than many of our competitors because of the profile of the UK economy on top of the contraction of investment, economic flight, and restrictions on labour mobility that we were already seeing as a consequence of Brexit. Our services-centred economy and the flexibility our businesses have had in a liberalised labour market were both highly integrated into our biggest economic market but from 2021, new barriers are being erected to that market.

Therefore, it is imperative that we have information on the core estimates of what the economic and business impact will be of the proposed trade agreement with the EU. When I asked the Government for this in a debate recently, I received subsequent correspondence from the noble Lord, Lord True, for which I am grateful. However, he said:

“The economic impacts of our trade deal with the EU are the subject of a thriving public debate among analysts. It is impossible for a single model, number or scenario to capture that complexity or represent the varying impacts that will be felt across different parts of the economy.”


It seems to be possible to give a model, number and scenario of the impacts of a hoped-for trade agreement with the US, and a hoped-for Japan agreement, but the Government refuse to do so for what is by far our biggest import and export market. It is not acceptable that we go blind into making serious decisions, impacting on our businesses and private sector for the long term, without the Government releasing core estimates of the economic impact of their proposed agreement with the EU.

Covid-19: Financial Markets

Lord Purvis of Tweed Excerpts

Wednesday 25th March 2020 Lords Chamber

[Lord Callanan]

I thank the noble Lord for his question. He is right to draw attention to the profiteering from a small number of retailers. We are aware of that and are looking urgently at what legal powers and frameworks are in place in order for us to do something about it. We will not hesitate to take any action that is required. With regard to his second point, I am afraid that, sad to say, a small number of unscrupulous and callous individuals will always seek to take advantage of any crisis.

[Lord Purvis of Tweed (LD)]

My Lords, I think we are all very grateful to the noble Lord, Lord Bates, for tabling this question. The Prime Minister’s comments at Prime Minister’s Questions were welcome; he said that the Government are considering further legislative proposals to address the very point about profiteering. The gaming of the financial services sector is often hidden from the public eye but is just as insidious as those people who seek to make profit out of a national emergency. Perhaps the figures that the Minister referred to reflect the fact that a number of weeks ago the European Securities and Markets Authority limited the capacity for short selling, which included the UK, and the UK Financial Conduct Authority quite rightly banned the short selling of 140 Italian and Spanish stocks, aware that this is a considerable issue. The noble Lord, Lord Bates, referenced other countries: South Korea has banned short selling for six months and limited buy-backs, and Spain has banned them for a month. If they are able to take preparatory action, it is quite right that the UK does so as well. The Minister referred to what a high bar might be; this emergency is a high bar to take precautionary action to ensure that the very many families and households who will suffer this emergency for months and potentially years to come will not see those within the financial services sector profiteering from their pain.

[Lord Callanan]

A ban has already been imposed on the short selling of stocks because regulators in their own individual countries have imposed bans. A small number of European countries like the ones he mentioned have imposed bans on short selling, and of course the London authorities have then reflected that in our own regulation. Most of the major trading houses have not yet instituted bans, but this is something that we are looking at closely. The FCA has the powers to restrict and prohibit short selling if that is required. We are keeping this under constant review and there is no evidence that it has contributed to the fall in the market. Moreover, as I have said, the level of short selling over recent days has in fact been declining.