Strengthening Standards in Public Life — House of Commons, 2021-11-17
Topic: Government Operations
Alexander David Sobel (Labour, Centre-left): Thank you for calling me, Mr Deputy Speaker, and I thank the previous occupant of the Chair for guiding me in the conventions of the House. I did email the Member to whom I shall refer, but I can see that he—the Leader of the House—is in his place. I am not sure whether he read my email, but I am going to refer to him because last Sunday, on social media, I saw an article in the Mail. I am not an avid reader of the Mail—which may surprise Conservative Members!—but I opened and read the piece, and I was myself somewhat surprised by its contents. It is good that the Leader of the House is present, as he may wish to intervene and respond to some of my points According to the Mail, the Leader of the House "borrowed up to £2.94 million a year in ‘director’s loans’ from his UK-based Saliston Ltd between 2018 and 2020 Parliamentary rules require MPs to be ‘open and frank in drawing attention to any relevant interest’. Although it does not explicitly cover director’s loans, the code of conduct requires directors to declare ‘taxable expenses, allowances and benefits’ In the MPs’ Register of Interests, Mr Rees-Mogg disclosed himself as an ‘unremunerated director’ and shareholder of the firm, but did not say he had taken out the loans By using ‘director’s loans’—classed by the Government as a taxable benefit—he was able to borrow the large sum at very low interest." I will come to the details of that later The Leader of the House "insisted"—I assume directly to the Mail—that "as the loans were not earnings, he was not required to declare them to Parliament and he had not broken any rules." He told the Mail that "the 2018 loan was ‘primarily’ used to buy and refurbish his £5.6 million home in Westminster. He would not say what the rest of the money was for But a source in the Commons sleaze watchdog"— that is the Mail’s language, not mine; I assume that it refers to the office of the Parliamentary Commissioner for Standards— "said the loans should ‘absolutely’ have been declared in the Register of Interests, adding: ‘The whole point of registration is the public should be able to know what is governing your decision-making and the actions that you take.’" The Leader of the House, says the Mail, "bought his house, formerly Tory HQ" On Twitter, Baron Leigh of Hurley, a former Conservative party treasurer, challenged me, saying that it was absolute rubbish that the house was formerly the Tory headquarters. If the Leader of the House wants to tell us that it was not, I shall be happy to apologise, but that is what is says in the Mail. It says that the Leader of the House bought the house "in February 2018 using a mortgage with Coutts bank, Land Registry documents show The £6 million he took in loans includes £2.94 million in 2018, £2.3 million the following year and £701,513 in 2019-2020, Companies House documents reveal In the first year he paid no interest, in the second he paid £46,915 and in the final year £2,030—£48,945 in interest over three years, equivalent to a rate of 0.8 per cent." My constituents, when buying a house, would struggle to get an interest rate of 5%. It sounds like a benefit to me, although I might be wrong The Leader of the House, says the Mail, "was a director of Saliston Ltd until he joined the Cabinet in July 2019, but retains a 100 per cent shareholding and is a ‘Person of Significant Control’…Saliston Ltd has previously been described as a ‘holding company’ by Mr Rees-Mogg "It has £8 million property assets"— including a Mayfair house— "and nearly £1 million in other investments "In 2018"— I am particularly interested in this— "it took out a £2.87 million bank loan…the same year it lent Mr Rees-Mogg £2.9 million." I do not know the interest rate at which it took out the bank loan, but we know the interest rate at which the Leader of the House repaid it. [Interruption.] I am happy to take an intervention from the Leader of the House at any point. Saliston Ltd has a controlling stake in Somerset Capital Management LLP, the parent firm of Somerset Capital Management (Cayman) Ltd in the Cayman islands—an offshore entity I do not have much time, so I will come to the point; I would be fascinated to hear from the Leader of the House on this. He is quoted as saying: "The loans from 2018 were primarily taken out for the purchase and refurbishment of [my home] as temporary cash flow measures All loans have either been repaid with interest in accordance with HMRC rules or paid as dividends and taxed accordingly." I worked out that, on a ministerial salary, it would take approximately 100 years to repay the loan However, this might be an explanation for how it happened: "Somerset Capital Management LLP’s accounts show its limited-liability members were remunerated with £3.8 million in 2021." I do not know whether those two things were connected at all. I might be wrong; I am not an expert in complex financial instruments—[Interruption.] Yes, I am not, so if the Leader of the House wants to intervene and correct me, I am happy to let him, because unfortunately I have never managed millions of pounds What I would like to know is whether the Leader of the House declared the loan and the details of it to the permanent secretary. Should he not fully disclose those dealings so that it can be judged whether he breached the rules of this House and the ministerial code? It is a matter of trust, not just in this Government, but in the handling of business in this House and where the responsibility, accountability and sanctions lie for the breach of the ministerial code The public are getting the impression that this Government are just marking their own homework, and obviously the Prime Minister makes adjudications on the ministerial code. Coming back to the recommendations from the 2018 report by the Committee on Standards in Public Life, while the Leader of the House blames the House for not having implemented them more quickly, it is his own failure, because he controls our time. When is he going to bring forward the recommendations from that report?