Boris Johnson's loan and the gaping holes in our political finance rules
Boris Johnson's £800k loan exposes some unbelievable loopholes - including the rather loose concept of "family member"
Former Prime Minister Boris Johnson made millions of pounds from his media activities and owns three properties. Nonetheless he had run out of money in 2020 and needed to borrow £800,000 for his everyday living expenses. At the time he was prime minister and earning £164,000, as well as living in free accommodation in central London. It’s reasonable to assume that Johnson would not have been in this situation had he remained married to Marina Wheeler, but the purpose of this post isn’t to study Johnson’s marital conduct.
As is well-known, Johnson, thanks to an introduction from BBC Chairman Richard Sharp, got Canadian businessman Sam Blyth to act as guarantor for his £800,000 loan. We keep hearing that Blyth is Johnson’s “distant cousin”, but the role of Richard Sharp shows that they were not close. If you have a cousin you’re in regular touch with whom you think might be good for a few quid, you don’t need an intermediary to introduce you. So, what exactly is the relationship between Johnson and Blyth? I could not find this easily, so I did a little digging: Sam Blyth’s great-grandfather Sir George Williams is also Boris Johnson’s great-great-great-grandfather. This makes them third cousins twice removed [NB after posting this various people online told me they think it’s second cousin twice removed. I’m happy to share this publicly because I don’t think it changes the underlying point (these aren’t “family members” according to any good-faith definition), but it is important to be as accurate as possible.] According to a 2015 study, the average British person has nearly 200 third cousins. This is presumably why Johnson needed Sharp to introduce him to Blyth. To call them “cousins” is a stretch.
Johnson and Blyth were basically strangers. But once they’d been connected by Sharp, their relationship thickened. In February 2021 Johnson was able to get his much-needed £800,000 loan thanks to Blyth’s guarantee. In October 2022 Johnson and his at-the-time-of-writing wife Carrie were guests at Blyth’s villa in the Dominican Republic. It was from there that he made his dash back across the Atlantic to mount an abortive leadership bid after the fall of Liz Truss. A bid that ended, as with so much in Johnson’s life, in the humiliation of his allies.
Questions were asked at the time - whose villa is this that Johnson was staying in? Why hasn’t he declared it as a gift? And the answer was that he “argued that the use of the Dominican Republic villa did not need to be registered because its free use came from a family member providing a personal benefit.” This is where we get into the arcane and complex rules for MPs’ benefits and donations. MPs are entitled to receive hospitality and gifts from family members. You can imagine the scenario that an MP’s parent or spouse invites them on a weekend away; should they have to declare that? The rules carve out a specific exception: MPs need not declare gifts or hospitality that “could not reasonably be thought by others to be related to membership of the House or to the Member’s parliamentary or political activities; for example, purely personal gifts or benefits from partners or family members.” It’s reasonably clear that these rules were not devised in order to allow Boris Johnson to receive a gift from his third cousin twice removed.
But this overstretched concept of Sam Blyth as a “family member” of Boris Johnson was also used by Cabinet Secretary Simon Case to justify Johnson getting the £800,000 loan guarantee. As the Sunday Times reported on 28 January, a letter from Case notes that Johnson would be taking out a loan from his bank “at commercial rates”. (This in itself is important - Johnson did not get loaned the money by Blyth himself, but appears to have it from “his” usual bank with Blyth’s guarantee.) Case goes on to state that “the fact that you have this arrangement with a family member [my emphasis] should not count as something that needs to be declared”.
But perhaps the most worrying aspect of this is not the rather questionable use of the term “family member” to describe a distant relative. It is Case’s observation that “it is helpful that the family member is not a UK citizen and has no business or personal interests in the UK beyond your family connection.” This of course turned out to be untrue, as Blyth was in the running for a British Council role, but Simon Case, head of the Civil Service, was unaware that Blyth was being considered for a senior job in the Civil Service. Why did Case say it was “helpful”? Because, of those parliamentary rules. Included in the list of “gifts and benefits from sources outside the UK” that must be registered “if provided by a source outside the UK either free or at concessionary rates” are “loans or credit arrangements”.
But remember, Johnson didn’t get his loan “free or at concessionary rates”, but from his bank “at commercial rates”, guaranteed by his third cousin twice removed. And on the list of things that members “should not register” are “loans or mortgage arrangements on commercial terms” (para 42 of the code of conduct relating to the registration of members’ financial interests).
Should not register.
So in this case it’s clear that Sam Blyth has done nothing wrong. But it becomes easier to understand why Johnson didn’t just borrow the money from Blyth: that would have had to be declared. But the situation in which the loan was on commercial terms didn't.
So let’s suppose a financially stretched Prime Minister took a loan on commercial terms from a source outside the UK. Say, a private bank owned by a former Russian intelligence officer, just as a hypothetical example. In that case, this would not need to be declared, according to the rules. And the definition of “commercial terms” seems unclear. If it is interpreted with the same latitude as was the term “family member”, almost anything can be represented as being commercial in some context or other.
That doesn’t seem very sensible.