The collapse of Greensill Capital has shone an unflattering light into the murky corridors of Whitehall lobbying. That former prime minister David Cameron had acted on behalf of the now-failed supply chain finance company in lobbying senior ministers and officials has led to calls to reform the system, including extending the mandatory two-year cooling off period for former ministers. There is no suggestion that Cameron breached the rules. Just as shocking, however, has been the revelation that the government’s chief procurement officer began working at Greensill Capital while still a civil servant, again within the rules.
Two months before leaving his job in 2015 Bill Crothers, who oversaw contracts worth £40bn, took a part-time advisory role with Greensill Capital. Then, an apparent loophole meant that as a current employee of the company he did not have to disclose his appointment as a director of Greensill in 2016 to the Advisory Committee on Business Appointments, responsible for interpreting and enforcing the rules.
Lobbying is a legitimate business. It is essential to the functioning of a modern, sophisticated economy like Britain’s that companies, especially the large ones that are so vital to its operation, are able to communicate their needs to the government. Ministers need to consult widely and be made aware if they are inadvertently creating problems for the normal conduct of business. To make this system work, however, transparency is key: fears of backroom deals and shady influence-peddling can only be alleviated by an honest accounting of who has been talking before big decisions are made.
Concerns over Crothers’ relationship with Greensill go beyond just transparency and disclosure. That a senior civil servant was contemporaneously working for a company seeking government contracts is an obvious conflict of interest. Crothers’ defence that the role was approved by the Cabinet Office, the ministry responsible for the operation of government, and that his position was neither contentious nor uncommon, only suggests a deeper problem.
It is naive to expect that young former officials and politicians, like Cameron, with the potential for a whole second career will not make use of their experience and work as advisers to businesses. Their skillset, thanks to a lifetime in politics, lends itself to influence-peddling. There is public hypocrisy too: an unwillingness to pay public sector workers and ministers competitive salaries has led to an unspoken bargain that they will be compensated later by parlaying their contacts into lucrative jobs.
A parliamentary inquiry, as the opposition Labour party has been calling for, is merited; not only into the behaviour of former ministers and officials but also the rules under which the civil service operates. An announced inquiry by Nigel Boardman, a former partner at the law firm Slaughter and May and a board member of the business department, will be under the auspices of the Cabinet Office itself. Critics allege that its wide remit — including supply chain finance as well as lobbying — will reduce its focus. A select committee inquiry that wants to explore how the Treasury reacted to lobbying and if financial rules need tightening, should also find fertile ground.
A decade ago, following the UK’s expenses scandal when widespread abuse of the system by MPs was revealed, Cameron presciently said that lobbying would be the next big scandal. That moment has arrived and the government must recognise that fact. There will be no way out of the morass beyond a proper accounting and necessary reform.