Britain’s Conservative Party is mired in an influence-peddling scandal, not for the first time in a country that gave the world 19th-century novels of political and financial cronyism via Anthony Trollope.
The question, when the latest embarrassing details of nest-feathering have been fully aired, is where the damage will be felt most keenly: by ex-Prime Minister David Cameron, whose business dealings since leaving office have unleashed this latest ugly set of revelations, or by Boris Johnson, his successor in No. 10 and also no stranger to opportunism and close-knit circles? Or perhaps this will go deeper in the fabric of the British state by tarnishing the reputation of the civil service, which regards itself as a Rolls-Royce among state bureaucracies.
After weeks of silence about his secret lobbying of cabinet ministers for Greensill Capital, a now bankrupt supply-chain finance company in which he had millions in share options, Cameron has conceded he should have made contact “only through the most formal of channels” rather than through texts and requests for contact with the present Chancellor of the Exchequer Rishi Sunak and Health Secretary Matt Hancock.
Well, hindsight is marvelous and the ex-PM is in “lessons learned” mode. But without chummy, informal access to old friends in government, it’s unlikely that a man who left office in 2016 having lost the Brexit referendum would have been promised such rich rewards in the first place. That explains why he ended up working for Lex Greensill, the company’s Australian founder, with whom he had dealings while in Downing Street.
A political reckoning is under way. Johnson, a Cameron rival since their days at Eton, has abandoned his usual vow of omerta on propriety issues and ordered a legal inquiry into his predecessor’s conduct. But it will be held on a narrow remit and behind closed doors, to keep the hounds off the scent of any cronyism in Johnson’s own circle.
Damage limitation efforts look to be failing, however. At least four committees of U.K. lawmakers will investigate the affair, and newspapers led by my old employer, The Sunday Times, are daily uncovering examples of influence peddling from Grensill’s period as an adviser to the Cabinet Office — a department that oversees relations between government and private sector on state contracts, but which is also an opaque fiefdom, close to No. 10 and with little openness about its activities.
The Labour Party opposition, muted by Johnson’s vaccination successes, has regained its voice, loudly denouncing “Tory sleaze” just as it did at the end of the Tory ascendancy in the 1990s. Labour leader Keir Starmer seeks to tar Johnson with scandal too — disgracing an ex-PM has a lower value than denting a present rival. He reckons voters will judge that after more than 11 years of unbroken office, the Conservatives are institutionally to blame.
But the Greensill scandal is as much about the threat to standards in the British civil service as it is about the easy morals of relatively youthful prime ministers who regard public service as a springboard to private affluence (Labour’s Tony Blair was another example).
Consider that the former head of the U.K.’s multibillion-pound procurement operation, Bill Crothers, was allowed to work as an adviser to Greensill while still in his government post — an arrangement signed off by another Cabinet Office civil servant, John Manzoni, who’d also spent decades in big business. There was genuine shock among the top ranks in Whitehall, the London home to Britain’s state bureaucracy, when the Crothers arrangement was revealed. Now the entire civil service has been ordered to declare second jobs by the end of this week, a sign of panic at the top of a machine that prefers to turn slowly.
This matters because the U.K. is regarded as having an effective civil service, and a relatively clean one — in contrast with the often hand-in-glove arrangements of senior officials and business in France. The Greensill contacts were too foggy for any government to be proud of. If he was as much of a boon to the public realm as Cameron and his civil servants thought, why not be more open about his role and tough out any criticism on grounds of utility?
It’s true that bureaucratic elites are criticized for being cut off from “the real world” of business and finance. Senior civil servants have been encouraged to take time out in the private sector and return with a more varied skillset. That explains why the late Jeremy Heywood, the country’s top civil servant under four prime ministers, did a stint at Morgan Stanley. When he returned to Whitehall he recommended former colleague Greensill to Cameron. Greensill wasn’t given a job, but he had a Cabinet Office business card and phone number.
Most senior civil servants resisted what they thought was the unnecessary use of supply-chain finance, where money is lent to suppliers secured against their invoices, but Heywood and Greensill managed to get the Department of Health to sign up. Heywood was keen to burnish pro-business credentials in the civil service; the Greensill fiasco has achieved the opposite.
The finance firm was soon lending money to companies such as Sanjeev Gupta’s GFG Alliance before they’d even sold anything, labeling the wheeze as “future account receivables finance” — a euphemism Trollope would have relished. Having people like Cameron and Crothers on the payroll gave Greensill credibility. In the end, no lobbying could save him.
The upper echelons of the civil service have been learning the wrong lessons from the private sector. There’s no need to import financial wizardry when so much needs fixing in the core operations of the state machinery. Independent scrutiny for potential conflicts of civil service interests needs to be even stricter than for politicians. These people must be above both politics and commercial self-interest. Clearly the system has been failing.
Whitehall’s morale, post-Heywood, is low. Johnson’s former muse Dominic Cummings despised its supposed strategic failures, driving anyone who got in his way out of their jobs. The prime minister refused to back an independent adviser on the ministerial code against the Home Secretary for her alleged bullying of officials, prompting the adviser’s resignation.
This corrosion spans more than one government, but it’s real and risks being made worse by the relentless focus on modernization and pressure to embrace both the private sector’s talent and its modus operandi. It is time Britain ditched the complacency about its Rolls-Royce civil service and faced up to the rot. An elite mandarin class that plays by strict rules and puts the public good first is precious, and fragile. On that score, the U.K. won’t know what it’s had until it’s gone.
Martin Ivens is a director of the Times Newspapers board.
Source: Bloomberg
