BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
 You are in: UK: Politics  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
England
N Ireland
Scotland
Wales
Politics
Education
Business
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
Monday, 9 December, 2002, 10:59 GMT
What is a blind trust?
The thorny issue of blind trusts has raised its head again in the latest round of questions in the Blair flats row - but what are these trusts and what do they do?
On the face of it 'blind trusts' are meant to inspire confidence that leading government ministers are not going to make biased decisions based on their business interests.

Blind trusts are devices which place the management of a person's assets into the hands of other experts who decide how those funds are invested.

Anybody taking out a blind trust is supposed to remain independent from the trustees and not influence their decisions in any way.

Hence the owner of the assets is 'blind' to how his or her funds are managed and what assets are bought or sold. However, the owner of the trust can still collect interest and dividends.

'No prejudice'

Ministers with substantial business interest have used blind trusts as a means of preventing any conflicts of interest with decisions they have to make as part of their duties of office.

By doing so, they argue, they are free to go about their business without prejudice.

The rules say: "Once a blind trust has been established, the minister should not be involved or advised of decisions on acquisition or disposal relating to the portfolio."

But Downing Street insists the rules cover only investments which ministers' decisions could affect - such as trading shares.

Ministers are quite entitled to take money out of the blind trust to buy houses or flats, says Number 10.

Partially sighted?

However, blind trusts themselves are not perfect and far from diffusing charges of political sleaze they have invited a storm of controversy of their own.

For a start ministers know that they will regain control of their assets when they leave office.

The other drawback of blind trusts is that they are shrouded in mystery. The identities of the trustees are rarely identified.

They could be friends or business associates of the government minister involved, which would in turn put into doubt the real independence of the trustees.

The creation of blind trusts has failed to stop newspaper stories about investments made on behalf of some ministers, such as former Paymaster General Geoffrey Robinson and Trade and Industry Minister Lord Sainsbury.


Latest news

Background & analysis

Profiles

AUDIO VIDEO

HAVE YOUR SAY
See also:

16 Feb 99 | Politics
30 Nov 97 | Politics
09 Dec 02 | Politics
Internet links:


The BBC is not responsible for the content of external internet sites


E-mail this story to a friend



© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes