He might well have those holdings – but we are not permitted to know. All we can know is that he holds his investments through what the Register of Ministerial Interests describes as a “blind trust/blind management” arrangement. The purpose of the arrangement, and others held by other Ministers, is said to be to ensure that Ministers, who have extraordinary powers to improve the financial fortunes of businesses and sectors, are not tempted to exercise those powers to improve their own financial interests. Those powers don’t exist for Ministers; they exist for the public interest.
When you become a Minister, you are supposed to hand over management of your investments to a third party and then remain ‘blind’ as to what changes they make. The idea is that you don’t know, as you exercise your Ministerial powers for the public interest, what investments you hold privately.
The problem is that the arrangements are ineffective and are structurally inclined to fail. They are ineffective because you know, when you set up your “blind trust/blind management” arrangement, what investments you pass to the trustee or fund manager. Indeed, you are explicitly permitted to give general directions on the nature of investments (illustratively ‘don’t change the balance of my portfolio’).
And they are structurally inclined to fail because they are a private arrangement between Minister and trustee/fund manager. The trustee or fund manager is appointed and paid by the Minister for their services and so is incentivised to keep him happy; the trustee/fund manager is likely to have both contractual and other legal obligations to keep confidential details of their communications with the Minister; and they only owe a duty to the Minister – no one else.
So if the Minister asks what investments he holds, or gives the trustee or manager directions, how will we ever know? The arrangements are entirely unsupervised. What’s more, there are no rules that limit who the trustee or fund manager can be: you could appoint a long-standing personal friend.
It recently emerged that the Prime Minister had failed to declare that his wife owned an interest in the nursery sector that benefitted from a major financial commitment announced in the Budget. And to try and obtain some level of transparency over the financial affairs of the Prime Minister, Good Law Project made a freedom of information request to the Cabinet Office.
The purported summary of his tax returns published by the Prime Minister disclosed that he had a purportedly “blind management arrangement in place” which was run by a “single US-based investment fund.” We did not ask what investments the investment fund held. We simply asked who that fund manager was. Remarkably, the Cabinet Office refused to disclose that information including because (it alleged) “the balance of the public interest favours withholding this information”. We are, of course, appealing that refusal.
The idea blind trusts/blind management arrangements are an adequate safeguard against the misuse of public powers for private enrichment would be a joke – but for the fact that the VIP lane demonstrates that abuse of public powers by Ministers is no laughing matter. But the notion that the public should not be permitted even to know the name of the fund manager, who might be a personal friend or former colleague of the Prime Minister, is an outrage.
How can we be satisfied there is no abuse of public powers if we cannot know what investments he holds – or even who is making investment decisions for him? Transparency may be inconvenient to the Prime Minister – he shies from it as a vampire from sunlight – but it is the only way to protect the public interest.
We are entitled to know.
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