Boris Johnson today ordered a ‘thorough and prompt’ probe into the lobbying row involving David Cameron after the former PM finally admitted he should not have contacted ministers for Greensill Capital via text.
An official Whitehall investigation is set to take place after Mr Cameron’s actions triggered calls for an overhaul of the system.
The Cabinet Office process, headed by legal expert Nigel Boardman, will cover the way representations were made to the government and how contracts were awarded.
The news comes after Mr Cameron broke his silence last night after weeks of dodging questions, acknowledging that communications with the Government should be made ‘through only the most formal of channels’.
Mr Cameron was a paid adviser to Greensill, whose collapse is threatening thousands of steel jobs in the UK, and wanted it to get access to an official coronavirus support scheme.
He is not thought to have broken any rules. But his approaches to ministers – including Chancellor Rishi Sunak and Matt Hancock – on behalf of the specialist lender have caused outrage.
Labour demanded Mr Cameron faces a grilling in Parliament, with Gordon Brown saying there should be a five-year ban on ex-premiers lobbying.
There were growing signs of Conservative unrest today, as Liaison Committee chair Sir Bernard Jenkin branded the situation ‘corrosive’ and said the government must ‘do something about’ gaps in the system.
There is also anger that Mr Cameron chose to issue his statement while the country is in mourning for Prince Philip.
David Cameron took scandal-hit financier Lex Greensill (right) for a ‘private drink’ with Health Secretary Matt Hancock to discuss a payment scheme later rolled out in the NHS
The Treasury released the Chancellor’s texts after a freedom of information request into efforts by the ex-Tory leader to contact ministers in search of millions of pounds of extra Covid rescue cash.
Cameron admits meeting with Saudi crown prince
David Cameron has confirmed he met with Saudi Arabia’s crown prince during a business trip in January last year.
The former British prime minister said he had met the leader along with scandal-hit financier Lex Greensill to advise on the country’s upcoming chairmanship of the G20.
Saudi journalist Jamal Khashoggi, a critic of Mohammed bin Salman’s authoritarian consolidation of power, was brutally murdered in early October 2018.
Later that month, former MI6 chief Sir John Sawers said ‘all the evidence’ suggested the journalist had been murdered on the orders of someone close to the crown prince.
In a statement to the PA news agency, Mr Cameron said: ‘As part of my work, I assisted with presentations made by the company overseas, including in the US, Singapore, South Africa, Australia and the Gulf.
‘While visiting the Kingdom of Saudi Arabia in January 2020 to advise on their forthcoming chairmanship of the G20, I also – with Lex Greensill – met with a range of business and political leaders, including Crown Prince Mohammed bin Salman.
‘As the Softbank Vision Fund was by this time the largest investor in Greensill, the company was, in effect, part owned by the Public Investment Fund of Saudi Arabia (itself a major participant in the Vision Fund).
‘Greensill planned to open a new regional office in Riyadh as part of its international expansion and I wanted to assist in this effort.
‘While in Saudi Arabia, I took the opportunity to raise concerns about human rights, as I always did when meeting the Saudi leadership when I was prime minister.’
In February this year, a declassified US intelligence report stated Crown Prince Mohammed, the son of King Salman and Saudi Arabia’s de facto ruler, was likely to have approved an operation to kill or capture the journalist inside the Saudi consulate in Istanbul.
In a statement running to nearly 1,800 words long – Mr Cameron said: ‘In my representations to Government, I was breaking no codes of conduct and no Government rules.
‘Ultimately, the outcome of the discussions I encouraged about how Greensill’s proposals might be included in the Government’s CCFF [Covid Corporate Financing Facility] initiative… was that they were not taken up. However, I have reflected on this at length.
‘There are important lessons to be learnt. As a former prime minister, 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.’
Greensill asked for the terms of the CCFF – administered by the Bank of England – to be altered so it could access it, but this was rejected.
The firm was the main lender to businessman Sanjeev Gupta’s GFG Alliance which employs 5,000 people in the UK, including 3,000 at Liberty Steel – jobs now at risk after Greensill filed for insolvency, also rendering Mr Cameron’s reported tens of millions of pounds of share options worthless.
Speaking on BBC Radio 4’s Today programme, Sir Bernard said governments of all colours had failed to address the rules around lobbying.
He urged Boris Johnson to appoint a new adviser on ministerial interests as soon as possible, saying that person should carry out an investigation.
‘The sensible thing would be for the Cabinet Secretary and the Prime Minister to ask him to conduct an investigation…
‘That person should not take the job unless they can do this, because this subject has been avoided for years and years.
‘There is too many at the top of politics, at the top of civil service, who do not want this conversation to happen because they are about to retire.’
Sir Bernard complained that the Advisory Committee on Business Appointments was ‘toothless’ and has ‘no sanctions’.
Asked how damaging the Greensill row is, Sir Bernard said: ‘This is pretty devastating. It is pretty corrosive. It is exactly the kind of cronyism that we campaigned against in opposition and the Labour Party are now campaigning against when they are in opposition.
‘We all ought to agree to do something about it. It starts with the civil service code and the ministerial code.’
Mr Brown said ministers should not be ‘entertaining such lobbying’ and urged tougher rules.
‘I can’t comment on the individual detail of this, but for me there are principles about public service – it cannot ever become a platform for private gain,’ Mr Brown told Today.
‘Ministers must never be lobbying, former ministers, prime ministers, must never be lobbying for commercial purposes. Current ministers should not be entertaining such lobbying.
‘And if we can’t succeed in achieving this stopping by the sort of flexibility of the rules, we are going to have to pass laws to make sure that at least for say five years, no serving or former prime minister or minister, is ever lobbying for any commercial purpose within government.
‘It simply brings public service into disrepute.’
Sir Bernard said the controversy reflected a culture of ‘a very casual way of running governments’ – but warned that a five-year ban would not tackle the fundamental problem.
‘Well, (Mr Cameron) is clearly feeling acutely embarrassed,’ Sir Bernard said.
‘And in some respects, he is reflecting a culture of a very casual way of running governments and running the country that didn’t start with David Cameron; ‘sofa government’ long pre-dated David Cameron.
‘This very informal way of conducting relationships about very important matters and the distribution of public money, well I don’t think the public thinks that’s acceptable.
‘But I am not going to pass judgment on David Cameron, I think in some respects it’s a distraction.
‘What is more important is not who is lobbying, and even if you have a five-year ban as suggested by Gordon Brown, is it OK for an ex-prime minister to start lobbying after six years?
‘You can’t make laws stretch far into the future to bind people to previous employment, it just doesn’t work.’
Conservative MP Tim Loughton also took aim at Mr Cameron over the timing of his statement.
‘I think the timing of that statement was very, very poor and ill thought out,’ he told BBC Radio 4’s Westminster Hour.
It emerged yesterday that the ex-PM emailed Boris Johnson’s senior special adviser asking him to rethink the application hours after it was rejected – describing the move as ‘nuts’.
In an email to Sheridan Westlake last April, Mr Cameron said: ‘It seems nuts to exclude supply chain finance [Greensill’s speciality].
‘We all know that the banks will struggle to get these loans out the door – and so other methods of extending credit to firms become even more important.’
Mr Hancock has become the fourth minister embroiled in the scandal – after Mr Sunak and two Treasury ministers – as it emerged he had a ‘private drink’ with Mr Cameron and the founder of the now-collapsed finance firm.
The Health Secretary met the former PM and Australian banker Lex Greensill in October 2019 to discuss a payment scheme that was later rolled out in the NHS.
Mr Greensill’s firm wanted to introduce a scheme to pay doctors and nurses daily or weekly.
Last April it was announced that Earnd, then a division of Greensill, would be available for free to NHS employees to access their pay.
The scheme saw Earnd provide immediate payment to NHS employees before recouping staff salaries from the NHS.
Greensill framed the scheme as benevolent, but two senior former employees say the plan was to convert the NHS’s future payments into bonds and sell them internationally.
The developments, reported by The Sunday Times, led to fresh questions over Mr Cameron’s actions.
Sir Alistair Graham, the former chairman of the Committee on Standards in Public Life, described the affair as the ‘biggest lobbying scandal in a generation’ and said there should be an independent inquiry.
Labour also called for an investigation and urged Mr Sunak to make a statement to Parliament.
An ally of Mr Hancock said: ‘Matt acted in entirely the correct way – he updated officials on the business that was discussed, as is appropriate.’
Mr Greensill was understood to have written to Mr Hancock’s office about the payment scheme in August 2019, copying in NHS England chairman Lord Prior, before the Health Secretary commissioned advice from officials
Greensill (its UK base is pictured) wanted the Bank of England to act as a final guarantor to protect its clients in the event of further economic difficulties
Mr Cameron was said to have described the decision to exclude his employer’s firm, Greensill Capital, from Rishi Sunak’s multibillion-pound Covid scheme as ‘nuts’ and pressed for the Chancellor to reconsider
And it was today suggested that Mr Cameron ‘s embarrassment has been stoked by aides of Michael Gove (pictured)
Plans to stop steel tycoon buying own plants on the cheap
Jobs fears: Sanjeev Gupta employs around 5,000 people in the UK including 3,000 at Liberty Steel
Liberty Steel boss Sanjeev Gupta will be prevented from buying back his plants at bargain prices if they go bust, under plans being drawn up by the Government.
The metals magnate’s empire has been left on the brink of collapse after its largest lender Greensill Capital, which David Cameron worked for, imploded.
He is scrambling to raise cash after ministers rejected a £170million bailout of Liberty’s parent company GFG Alliance last month.
Whitehall officials are reportedly now concerned Mr Gupta might declare his steel business insolvent and later try to repurchase it.
This is a process known as ‘phoenixing’ – which company directors are strongly advised against doing. GFG employs 5,000 people in the UK, of which 3,000 are steelworkers spread across 12 sites.
Boris Johnson has said he is ‘very hopeful’ that the Government can save Liberty and all options – including nationalisation – are on the table.
To block Mr Gupta from potentially buying back parts of Liberty, officials are considering appointing accounting firm Deloitte to handle a possible insolvency that would carve it out from the rest of the company, according to The Sunday Times.
A GFG spokesman said: ‘Liberty Steel UK is undertaking significant self-help measures… working with our customers to achieve terms that will bring in cash earlier.’
Shadow defence secretary John Healey (left) lobbied the Business Secretary Nadhim Zahawi (right) to hand Greensill £200million in COVID-19 loans ‘without delay’. He claims he was protecting jobs in his constituency
David Cameron’s statement in full
‘Since the collapse of Greensill Capital, many questions have been raised about my dealings with Lex Greensill in government, and my subsequent involvement with the company.
‘I completely understand the public interest in this issue, given the impact of Greensill’s collapse on the hundreds of people who worked for the company and on other businesses and livelihoods. I feel desperately sorry for those affected.
‘I also worry about the future of firms like GFG Alliance and the many jobs that could be on the line, which are linked to what has happened at Greensill.
‘It’s important to understand that I was not on the Board of Greensill Capital, nor was I a member of the Risk or Credit Committees.
‘I played no role in the decisions to extend credit, or the terms on which such credit was extended, to GFG or any other customer. But that is little comfort to the many who worry about the firm’s future and their jobs. They are very much in my thoughts throughout this difficult and uncertain period.
‘Having said this, many of the allegations that have been made about these issues are not correct.
‘Lex Greensill was brought in to work with the Government by the former Cabinet Secretary, Jeremy Heywood, in 2011. He was not a political appointee, but part of the Civil Service drive to improve government efficiency.
‘In bringing him in, Jeremy was acting in good faith to solve a real problem – how to ensure companies in supply chains, particularly SMEs, could access low cost credit.
‘The false impression has been created that Lex Greensill was a close member of my team, meeting with me on a regular basis. The truth is, I had very little to do with Lex Greensill at this stage – as I recall, I met him twice at most in the entirety of my time as Prime Minister.
‘The Government supported his initiative to encourage large companies to use supply chain finance (SCF) to enable their suppliers to access low cost credit.
‘I announced this initiative as Prime Minister in October 2012. I made it clear that the Government would play its part through the community pharmacy scheme, ensuring that thousands of pharmacies could get early payment to improve their access to credit and cash flow.
‘This scheme has successfully reduced costs to the NHS and enabled many thousands of pharmacies to access early payments and low cost credit.
‘The idea of my working for Greensill was never raised, or considered by me, until well after I left office.
‘I took up the position as a part-time Senior Adviser to Greensill Capital in August 2018. This was shortly after General Atlantic, one of the most respected international backers of tech sector companies, invested in the company. Large financial institutions, like Credit Suisse, were helping to enable Greensill’s expansion.
‘Likewise, well-known international blue-chip companies such as Airbus, Vodafone, Nissan, AstraZeneca, Ford and Oracle contracted and partnered with Greensill. The company had a strong board, with experienced figures from business, banking and finance.
‘I was not a director of the company, and was not involved in the oversight of management, or the day to day running of the business. I was contracted to work for the company for 25 days per year (details of my other activities since leaving Downing Street are set out at the end of this statement).
‘My remuneration was partly in the form of a grant of shares. Their value was nowhere near the amount speculated in the press.
‘Part of my motivation for accepting the role was my desire to work for a UK-based, entrepreneurial, early stage finance and technology venture, rather than simply work with larger, more well-known financial institutions.
‘I remain proud that during my time as Prime Minister the UK became a global centre of the new and emerging FinTech industry. Greensill was one of the fastest growing UK FinTech businesses. I was attracted by the solution it offered, supporting businesses to gain access to working capital.
‘I later became an enthusiastic advocate for Greensill’s pay product, Earnd, which enabled employees to see and access their pay as they earn it, in real-time and, crucially, for free, with no charges or interest rates, rather than having to wait until the end of the month. This was, to my mind, an antidote to exploitative payday lending schemes.
‘My responsibilities included providing geopolitical advice to the leadership, helping to win new business, speaking for the company at conferences and events, and helping with plans for international expansion.
‘As part of my work, I assisted with presentations made by the company overseas, including in the US, Singapore, South Africa, Australia and the Gulf. While visiting the Kingdom of Saudi Arabia in January 2020 to advise on their forthcoming chairmanship of the G20, I also – with Lex Greensill – met with a range of business and political leaders, including Crown Prince Mohammed bin Salman.
‘As the Softbank Vision Fund was by this time the largest investor in Greensill, the company was, in effect, part owned by the Public Investment Fund of Saudi Arabia (itself a major participant in the Vision Fund).
‘Greensill planned to open a new regional office in Riyadh as part of its international expansion and I wanted to assist in this effort. While in Saudi Arabia, I took the opportunity to raise concerns about human rights, as I always did when meeting the Saudi leadership when I was Prime Minister.
‘Like many businesses in 2020, Greensill – and many of its clients – was negatively affected by Covid. Companies facing challenging financial markets, especially ones whose activities impacted many other businesses, were encouraged to make representations to the Government.
‘I made representations to the Treasury and others about the potential for the company to continue to play its part in extending credit to businesses, particularly via the Covid Corporate Financing Facility (CCFF). (The approach proposed by Greensill mirrored very closely action that had been taken during the financial crisis in 2008/09, when supply chain finance bonds were included in a similar financing facility).
‘While I understand the concern about the ability of former ministers – and especially Prime Ministers – to access government decision makers and the sense, and reality, of ease of access and familiarity, I thought it was right for me to make representations on behalf of a company involved in financing a large number of UK firms. This was at a time of crisis for the UK economy, where everyone was looking for efficient ways to get money to businesses.
‘It was also appropriate for the Treasury to consider these representations.
‘Concern has been raised about the nature of my contact, via text message and e-mail. I understand that concern, but context is important: at that time the Government was – quite rightly – making rapid decisions about the best way to support the real economy and welcomed real time information and dialogue.
‘It was a time of national crisis with fears about businesses’ access to credit. Greensill Capital wanted to offer a genuine and legitimate proposal to help with this.
‘As part of my work for Greensill, I also discussed their solutions for supply chain finance and their pay product, Earnd, with others. This included various people to discuss the roll out of Earnd across the NHS, where it was being offered for free as part of Greensill’s Corporate Social Responsibility programme. Greensill met all costs themselves.
‘I was attracted to Earnd as an exciting and innovative product with the real potential to help employees with their finances, not least being able to get paid at the end of their shift, rather than at the end of the month. I considered it important that Earnd would remain forever free to use for all workers and public sector employers.
‘In my representations to government, I was breaking no codes of conduct and no government rules. The Registrar of Consultant Lobbyists has found that my activities did not fall within the criteria that require registration.
‘Ultimately, the outcome of the discussions I encouraged about how Greensill’s proposals might be included in the Government’s CCFF initiative – and help in the wake of the Coronavirus crisis – was that they were not taken up.
‘So, I complied with the rules and my interventions did not lead to a change in the Government’s approach to the CCFF.
‘However, I have reflected on this at length. There are important lessons to be learnt. As a former Prime Minister, 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.
‘There have been various charges levelled against me these past weeks, mainly that I made representations to the Government on behalf of a company I worked for. I did.
‘Not just because I thought it would benefit the company, but because I sincerely believed there would be a material benefit for UK businesses at a challenging time.
‘That was, in large part, my reason for working for Greensill in the first place. I deeply regret that Greensill has gone into administration, but the central idea behind their key product -using modern technology and deep capital markets in order to help firms be better financed, to grow and create jobs – was a good one.
‘My other work:
‘My other principal activities since leaving 10 Downing Street have included:
- Writing and publishing my memoirs;
- Serving as President of Alzheimer’s Research UK, leading a major fundraising drive and chairing their early diagnosis project, Early Detection of Neurodegenerative diseases (EDoN);
- Chairing the Patrons of National Citizens Service (NCS), which I set up as Prime Minister;
- Co-chairing the Council on State Fragility with the former President of Liberia and former President of the African Development Bank;
- Sitting on the Board of ONE, the advocacy group for international development; and
- Co-chairing Pew Bertarelli Ocean Ambassadors, where we seek to build on the success of the UK’s Blue Belt, which helps protect our marine environments, and promote its goals around the world.
‘I also back a range of charities and causes close to my and Samantha’s hearts, principally those associated with our Armed Forces and veterans, disabled and ill children, and Alzheimer’s. And I support a range of causes local to our home in Oxfordshire.
‘My commercial interests include advising three other firms – Fiserv, Illumina and Afiniti – working in the areas of FinTech, BioTech and Artificial Intelligence respectively.’I have also given a number of speeches, lectures and interviews through the Washington Speakers Bureau.