David Cameron has yet to comment on the revelation that he unsuccessfully badgered Rishi Sunak to agree to emergency loans for a company in which he had share options. Last week, the lobbying watchdog (created by Mr Cameron) ruled that, as he was technically an employee of the firm, the former prime minister broke no rules by repeatedly texting the chancellor’s private number. Perhaps Mr Cameron thinks that should be an end to the matter.
It must not be. The Greensill Capital affair sums up what is wrong with a cosy revolving-door culture in British politics. According to reports at the weekend, between 2012 and 2015 the company’s Australian owner, Lex Greensill, was informally allowed the run of Whitehall by Mr Cameron and his cabinet secretary, Sir Jeremy Heywood. During this time, he acted as a supply-chain finance adviser to the government, with extensive input across departments. Mr Greensill’s firm, which has now gone bust, garnered lucrative business as a result of one of his proposals, which was reportedly adopted against civil service advice.
Out of office, it became Mr Cameron’s turn to take up an advisory role with Greensill Capital. The former prime minister stood to make many millions from his share options in the company, until its risky financial structure ran into trouble during the pandemic. Mr Cameron’s pleading texts to Mr Sunak’s private phone thus had major implications for his personal finances. Technically, Mr Cameron has done nothing wrong. But when it comes to a basic smell test of propriety, this sequence of events stinks.
Sir Alistair Graham, the former head of the committee on standards in public life, has called for a full inquiry into Mr Greensill’s fast-tracked journey to the heart of Whitehall. That should be accompanied by the redrawing of transparency rules on lobbying, a practice once described by Mr Cameron as “the next big scandal waiting to happen”. As is plainly obvious, ex-politicians are hired by the private sector primarily to lobby and influence Whitehall. Any set of regulations that does not reflect and address this is not fit for purpose.
As the silent Mr Cameron emerges as a diminished figure from this grubby episode, there will be little sympathy among the 5,000 employees of Liberty Steel UK, which relied on financing from Greensill Capital. The government has so far refused to provide back-up funding for Liberty Steel, which is part of the Indian-born British tycoon Sanjeev Gupta’s business empire. This is understandable, given the opaque structure of Mr Gupta’s global business and the desire to ensure that any financial support stays in Britain. But in a steel market made even more challenging by the fallout from the pandemic, Westminster must now take a strategic grip on an industry that has staggered from crisis to crisis in recent years. A plan B for Liberty Steel, which could involve public ownership, must be readied, along with clear parameters and incentives for industry-wide investment to meet green targets that already are slipping out of reach.
From the cosy arrangements that facilitated Mr Greensill’s rise and promised to boost Mr Cameron’s bank balance, to the fragile financial engineering through which Greensill Capital propped up Liberty Steel, this has been another tale of dysfunctional capitalism at its most unedifying. It is past time for a proper overhaul of the way that Whitehall conducts too much of its business.