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14 Apr 2021

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David Cameron and Greensill: What’s it all about?

First of all this is an example of the need for a strong and independent press. These revelations of “cronyism” would not have come to light without the joint investigations conducted by The Financial Times and The Sunday Times.

Secondl, it is still getting worse.  it has now been revealed that a senior civil servant, Bill Crothers, worked for Greensill Capital – the financial firm at the centre of the David Cameron lobbying row – while still employed in Whitehall. news.sky.com  – Owl

www.bbc.co.uk

David Cameron’s efforts to lobby ministers on behalf of the finance firm Greensill Capital are to be examined during a government review.

The investigation will be led by lawyer Nigel Boardman. In an earlier statement, the former prime minister said he had not broken any rules.

But he admitted: “I accept that communications with government need to be done through only the most formal of channels, so there can be no room for misinterpretation.”

What did David Cameron do?

The man behind Greensill Capital – Lex Greensill – worked as an unpaid adviser to David Cameron when he was prime minister, and developed a policy designed to ensure small firms got their bills paid faster. The scheme also benefited Mr Greensill’s company.

Mr Cameron went on to work for Greensill Capital after leaving office, and tried unsuccessfully to lobby the government to increase the firm’s access to government-backed loans.

He pressed Treasury ministers – including sending Chancellor Rishi Sunak text messages – for emergency funding for the company, in which the former prime minister had a financial interest.

David Cameron and Lex Greensill also met Health Secretary Matt Hancock for a “private drink” in 2019 to discuss a new payment scheme for NHS staff.

Mr Cameron is reported to have told friends he was set to earn as much as £60m from shares in Greensill, where he had worked since 2018.

In his statement, he said: “Their value was nowhere near the amount speculated in the press.” But he has not given any more details.

In the end, Mr Cameron’s pleas to the Treasury for emergency loans for Greensill Capital were not successful.

The firm has now gone bust, throwing the future of thousands of workers at Liberty Steel, a company backed by the finance firm, into doubt.

Did this break any rules?

Mr Cameron didn’t appear to do anything wrong, under the current rules.

They state that: “On leaving office, ministers will be prohibited from lobbying government for two years”.

Mr Cameron stood down as prime minister in July 2016 and joined Greensill in August 2018.

But former Labour Prime Minister Gordon Brown has said the rules may need to be strengthened to ban former ministers from lobbying government for five years.

“Former ministers, prime ministers must never be lobbying for commercial purposes – cabinet ministers should not be entertaining such lobbying.”

Why is he still facing calls to be investigated?

Although Mr Cameron has been cleared by a watchdog of breaking lobbying registration rules, a Sunday Times investigation has shed new light on his dealings with Mr Greensill when he was prime minister, in the early days of the Conservative/Lib Dem coalition.

In 2012, Mr Greensill was made an unpaid adviser in Mr Cameron’s government, with a Westminster pass and access to government departments.

He used this access to promote a government-backed loan scheme he had devised.

Mr Cameron and the late Lord Heywood, the most senior civil servant at the time, were fully behind it, believing it would help to deliver on a promise to speed up payments to small firms.

But Mr Greensill also stood to make a lot of money from the scheme, even though the Sunday Times claims many in Whitehall had serious reservations about it.

How did Greensill’s scheme work?

Mr Greensill’s specialism was supply chain finance – a service for companies which don’t want to wait months for their bills to be paid.

For a small fee, the finance company pays the seller as soon as the goods are delivered, and get its money back when the bills are eventually paid by the customer.

Mr Greensill’s firm was at one point valued at $7bn (£5bn), with a fleet of four private jets.

He helped to convince the UK government to set up a supply chain finance scheme for pharmacies – paying them early for money they were owed by the NHS. In 2018, Greensill Capital won the contract to run it.

Why did Greensill Capital collapse?

Questions had been asked before about the sustainability of Greensill’s business since at least 2018.

But the final blow came last July, when one of its insurance companies withdrew cover that protected some of Greensill’s investors.

Liberty Steel, Britain’s third-largest steel producer employing 3,000 people in England, Scotland and Wales, was receiving financial backing from Greensill.

Its future is now in doubt.

Why does any of this matter?

The relationship between those at the top of government and big business has never been under more scrutiny, following questions over the way Covid contracts were awarded.

Critics argue that it is too easy for ministers and top civil servants to use their inside knowledge of Westminster to enrich themselves when they leave government. The danger is that decision-makers could have one eye on their next pay day, rather than the best interests of the country.

In 2010, Mr Cameron warned that the “the far-too-cosy relationship between politics and money” was “the next big scandal waiting to happen”.

There is also a question of access. Who gets time with ministers to push their cause?

There are thousands of lobbyists – from trade unions to environmental groups to multinational companies – why do some people appear to get favoured treatment?

What will the review look at?

The government says the review, which will report back by to PM Boris Johnson by the end of June, will examine the awarding of contracts for supply chain finance.

Downing Street says it will look at “how contracts were secured and how business representatives engaged with government”.

Mr Boardman will step down as a non-executive board member at the government’s department for business during the review.

Labour has criticised the scope of the review – and has called for a special Commons committee to investigate instead.