The multi-millionaire Leader of the Commons was able to borrow large sums at low interest rates thanks to directors’ loans
Labour has demanded an investigation into a £6 million loan that it says Commons Leader Jacob Rees-Mogg did not declare properly.
On Sunday, Labour deputy leader Angela Rayner wrote to the independent adviser on ministers’ interests, Lord Geidt, over a series of loans to Mr Rees-Mogg’s company Saliston Limited, between 2018 and 2020.
In her letter, she said that failing to declare director’s loans worth £2.94m a year “allowed Mr Rees-Mogg to borrow a large sum of money at a very low interest rate”.
She added: “The financial benefit to Mr Rees-Mogg in this transaction is the difference in the interest he paid on this loan compared to a loan that he could take out on the open market from another provider, for example a bank.
“In this transaction, this difference is the value of the financial benefit transferred to Mr Rees-Mogg, which is a financial interest that should have been declared.”
Mr Rees-Mogg borrowed up to £2.94m a year in “director’s loans” from his firm Saliston Ltd between 2018 and 2020.
Although it does not specifically identify director’s loans, the MP’s code of conduct requires directors to declare “taxable expenses, allowances and benefits”.
The Leader of the House of Commons stated that he was an “unremunerated director” and shareholder of the firm but did not mention he had taken out the loans.
By using director’s loans he was able to borrow the large sum at very low interest rates.
UK company Saliston Ltd has previously been described as a “holding company” by Mr Rees-Mogg, with £8m property assets, understood to include a Mayfair house.
Saliston also has a stake in Mr Rees-Mogg’s asset management firm Somerset Capital Management LLP, the offshore parent firm of Somerset Capital Management (Cayman) Ltd.
He paid just £48,945 interest to Saliston on £6m of loans over three years, a rate of just 0.8%.
The deputy Labour leader and shadow chancellor of the Duchy of Lancaster pointed to a section of the ministerial code which says that “ministers must ensure that no conflict arises, or could reasonably be perceived to arise, between their public duties and their private interests, financial or otherwise”.
After sending the letter, Ms Rayner said: “Jacob Rees-Mogg might think that a £6 million loan isn’t worth declaring, but the rules apply to him and every other Conservative minister.
” Boris Johnson and his ministers act like they are above the rules because they think that there is one rule for them and another for the rest of us.
“Labour would stop the rot, overhaul this broken system and establish an independent Integrity and Ethics Commission to stamp Conservative corruption out of our democracy.”
Mr Rees-Mogg has previously defended his use of the loans, which he used to buy a house in Mayfair.
He has added that the company, Saliston, is “100% owned by me” and is declared as such in the Commons register of interests.
In a statement to the Mail on Sunday, which first broke the story of the loans, he added: “It [Saliston] has no activities that interact with Government policy.
“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.”
George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.