Monday, 19 February 2018

How can this minister act objectively?

It is my clear recollection that in the 1960s and '70s government ministers, on appointment, sold off any shareholdings or put them in a blind trust.

Trusts can be active or passive. Active funds give trustees to the power to manage funds to their best ability, selling or buying according to market conditions. Passive funds effectively froze the shareholdings etc. until the minister ceased to be a minister. Either way, the minister ceded responsibility to independent trustees in order to avoid a conflict of interest.

In the current Ministerial Code, there is a worrying element of discretion. The paragraph dealing with financial interests states:

7.7 Ministers must scrupulously avoid any danger of an actual or perceived conflict of interest between their Ministerial position and their private financial interests. They should be guided by the general principle that they should either dispose of the interest giving rise to the conflict or take alternative steps to prevent it. In reaching their decision they should be guided by the advice given to them by their Permanent Secretary and the independent adviser on Ministers’ interests. Ministers’ decisions should not be influenced by the hope or expectation of future employment with a particular firm or organisation.

An item in the New European's "Mandrake" column makes this relevant. Steve Baker, a minister in the Department for Exiting the European Union, purchased an interest last year in Glint Pay Ltd, a financial services holding company, and has retained it. This site asserts that:

Glint will offer a frictionless way to both store and spend your money in gold, including at the point of sale, just like a regular local currency. The bigger picture is that gold historically has been a better storage of value than any government-created currency, and therefore — with the aid of technology — is (arguably) a good candidate for an alternative global currency.

As "Mandrake" points out, there is a glaring conflict of interest here. Baker is bound to be involved in decisions which will affect the future value of sterling and possibly other currencies. He has had the temerity to accuse civil servants of a lack of objectivity, all the while possessing an indirect hedge in gold against a probable fall post-Brexit in both sterling and the euro.

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