Boris Johnson is facing further questions about his financial dealings during his time as Prime Minister, after newspaper revelations said he had a distant cousin act as a guarantor for an £800,000 credit facility.
According to the report by The Sunday Times, the former PM received the credit from February 2021 with Canadian multimillionaire Sam Blyth - a distant relative of Johnson - agreeing to cover repayments in the event Johnson could not afford to. The deal did not involve him loaning any money to Johnson. In the same month, Johnson was liaising with officials over his agreement with Mr Blyth - December 2020 - the businessman was a candidate to be the next CEO of public body the British Council.
A spokesperson for the ex-leader of the Conservative Party told the newspaper that all of Johnson’s finances “are and were properly declared”. They also said advice was sought from government officials and ethics advisors in advance of the arrangement.
It’s not the first time Johnson’s financial dealings in office have been called into question. A £112,000 renovation of his grace-and-favour Downing Street flat came in for scrutiny after it emerged it had been paid for by Tory donor Lord Brownlow, with the Electoral Commission fining the Conservatives for failing to follow the law over donations. A separate incident revolving around the funding of a Christmas 2019 holiday to the Caribbean island of Mustique was also investigated - with Johnson being cleared of any wrongdoing.
Although Johnson’s bid to make a return as PM in the wake of Liz Truss’s resignation failed, with his scandal-ridden premiership believed to have played a role in this result, a £1 million donation from former Brexit Party donor Christopher Harborne and his confirmation that he will fight his seat at the next general election suggests Johnson may mount another bid to return to frontline politics in the coming months.
So, what do we know about the 800,000 credit facility - and why did Johnson need it?
What is a credit facility?
A credit facility is a bit like a credit card - although it tends to cover much larger amounts than can be accessed with a standard bank card. Because of this, you only tend to hear of them being accessed by businesses.
It is a form of loan that allows a borrower to access money over an extended period of time, as and when they need it. They are able to borrow up to a certain amount.
In some cases, a guarantor is needed so that the lender can recoup its money if the borrower is unable to pay it back to them. You may be asked for a guarantor if you’re applying to rent a property but have a low income.
What we know about the Boris Johnson credit facility
On Sunday (15 January), The Sunday Times reported that Sam Blyth - a Canadian businessman worth at least $50 million (£41 million) - acted as a guarantor for Johnson on a £800,000 credit facility.
This credit was needed by Johnson to finance what the newspaper was told were day-to-day expenses. The PM and his allies were reportedly looking for a way to keep Johnson financially afloat, with a source quoted by the newspaper saying Johnson was close to “going broke”. Another insider revealed there were fears he would be unable to pay his own annual tax bill.
These financial difficulties came despite Johnson having earned £275,000 a year for being a Telegraph columnist on top of his MP salary before becoming PM - and despite a salary of £164,000 a year while in office.
In November 2020, Blyth emerged as a possible solution to the PM’s financial woes. The 67-year-old is a close friend of Johnson’s father Stanley and made his money in the travel industry, before founding a private schools network in Canada.
The Sunday Times says Johnson asked civil service chief Simon Case if Blyth could be his guarantor, with Case referring it to the Cabinet Office propriety and ethics team. This team told Johnson the arrangement was fine, so long as there was no conflict of interest, or risk of one, and there was no way Blyth could benefit from playing such an important role in Johnson’s personal dealings (all in line with the ministerial code of conduct).
However, the civil servants were unaware that Blyth was in the running to become the CEO of independent public body the British Council - a role with a six-figure salary - at the time the credit facility was being arranged. He was ultimately unsuccessful with his application.
Johnson’s spokesperson insisted he had nothing to do with Blyth’s application and was unaware of it at the time. However, they refused to tell The Sunday Times what steps Johnson took to ensure there was no potential conflict of interest.
“It is completely untrue that Boris Johnson in any way assisted with, or was even aware of, any application by Sam Blyth – formal or informal – to serve in any position whatever with the British Council, and neither was anybody in No 10 who was acting on his behalf,” said the spokesperson.
“As far as he is aware no-one in No 10 either knew about this alleged application or did anything to advance it. All Boris Johnson’s financial interests are and were properly declared.
“Boris Johnson sought advice from the Cabinet Secretary, the independent adviser on ministerial interests, and the propriety and ethics team. He followed their advice in full, as the Cabinet Office has confirmed.”
A Cabinet Office spokesperson said: “Advice was sought, proper process was followed and appropriate safeguards put in place. All ministers are expected to follow the rules as set out in the ministerial code in terms of making declarations and seeking advice as necessary.”
There is no suggestion of wrongdoing by Blyth, who has backed Johnson’s version of events.
Boris Johnson holidays called into question
As well as question marks over the credit facility arrangement, Johnson is also facing scrutiny for reportedly using a holiday home owned by Sam Blyth in the Dominican Republic. It is believed he was staying there before hurriedly jetting back to the UK in a bid to replace Liz Truss as Prime Minister.
The Sunday Times said Johnson has not disputed that Blyth funded the October 2022 trip, but insisted he did not need to declare it because it was a personal gift. The MPs’ code of conduct says that only gifts or benefits which “could not reasonably be thought” to relate to a politician’s parliamentary or political activities - including “purely personal” gifts from family - can be omitted from the MPs’ financial register of interests, so long as there is no doubt about them.
It is not the first time Johnson has faced questions about the funding of his holidays. In 2021 he was cleared of wrongdoing after failing to properly declare a 2019 holiday funded by Tory donor David Ross to the Caribbean island of Mustique.
Why does Boris Johnson news matter?
Boris Johnson’s credit facility is in the public interest for three key reasons.
Taken on its own, the British public would be well within their rights to ask whether a person who is clearly struggling financially can be trusted to act competently with the nation’s finances - especially given the amount of annual income they have to call upon. You could also question whether it gives the lender power over that individual.
And then we come to Sam Blyth’s involvement. The public has a right to know whether or not this individual held or still holds any sway over Boris Johnson’s political thinking and actions given he has previously wielded a significant element of power over the ex-PM’s personal circumstances.
Finally, this latest story about Boris Johnson potentially failing to follow the rules raises questions about his trustworthiness. Can the public trust Boris Johnson to act in their best interests over his own? And could he - wittingly or unwittingly - open himself up to being compromised in a way that would add to the UK’s political turmoil? The Chris Pincher scandal that led to his downfall in the summer all but paralysed central government for more than a month during the worst cost of living crisis the UK has seen in decades.
All of these things matter not only because Boris Johnson has been the Prime Minister, but also because he could be the Prime Minister again in the future. Johnson’s actions in recent months (standing in the Conservative leadership election, committing to the next general election, and raising a substantial amount of money via donations) suggest he may try to return to frontline politics again in the near future.