Rishi Sunak, David Cameron and Jeremy Hunt are among 10 ministers to declare their use of blind trusts to continue benefiting from potentially significant investment portfolios while in public office.
Cameron’s use of a blind trust as foreign secretary, revealed in the latest update to the list of ministers’ interests, marks a departure from his policy when he was prime minister.
When he took office in 2010, rather than move his shares into a blind trust, he sold his investments. The investments included a stake in his father’s Panama-based offshore trust, revealed by the Guardian in the Panama Papers, which Cameron sold in January 2010 for £31,500.
Quizzed in the Commons in 2016 about his sale of shares, Cameron said that compared with using a blind trust, “it may be even simpler and more straightforward to just sell everything, because then I would not own any shares”.
He described it then as “quite a sensible thing to do”. It is not yet apparent if Cameron’s view on divesting his shares has changed after seven years of a lucrative post-ministerial career reported by the BBC to include £7m in earnings for his lobbying work for Greensill Capital.
The list of ministers’ interests does not explicitly state whether Sunak, Cameron and the other ministers have handed over their assets to trustees, formally moving the legal ownership of the shares. There is no formal legal definition of a blind trust or exactly what constitutes a sufficiently independent third party to act as a trustee.
A Spotlight on Corruption report said blind trusts were “a tool to encourage the public perception that steps have been taken to manage conflicts of interests”.
The ambiguous disclosures leave open the possibility ministers are simply using a “blind management arrangement”, where they may have an informal agreement with their fund managers not to consult them on their present holdings or make decisions on the purchase and sale of assets. Neither system has any formal oversight.
The Cabinet Office describe blind trusts as “longstanding mechanisms for protecting ministers in the handling of their interests”, but their use has proved controversial. Critics have said a blind trust ultimately blinds the public, rather than the beneficiary.
Ministers are aware of what holdings they have when they are placed in a blind trust, and can give trustees general investment guidance that could lead to few changes in their portfolio.
This risk and the shortcomings of the blind trust system were previously noted in the ministerial code.
The 2005 version of the ministerial code had noted that “it should also be remembered that even with a trust the minister could be assumed to know the contents of the portfolio for at least a period after its creation, so the protection a trust offers against conflict of interest is not complete”.
This section, along with a more detailed outline of how a blind trust can operate, was removed by Gordon Brown when he became prime minister in 2007.