David Cameron: What is the Greensill Capital row and why is the former PM facing scrutiny?

The ever-evolving lobbying row involving former prime minister David Cameron, his former employer Greensill Capital and a number of ministers is a growing tsunami that's threatening to engulf the Tory party.

In a nutshell, the former PM had been communicating - via phone calls, texts, and meetings - with government ministers on behalf of the financial services company, in a bid to win from government a package of support to help survive the coronavirus pandemic.

The firm eventually collapsed, putting thousands of jobs at risk - but the issues potentially runs a lot deeper, with serious questions being raised about how government contracts are secured.

David Cameron and Boris Johnson are former colleagues and friends - they even went to same school as each other. Credit: PA

In a bid to address the issue, the former PM issued a lengthy statement denying breaking any lobbying rules, but admitted he should have communicated with the government "through only the most formal of channels".

The statement wasn't enough to satisfy the current prime minister, Mr Cameron's former friend Boris Johnson, who has ordered an independent inquiry to "thoroughly" investigate the situation and "promptly" provide answers.

Listen as our politics team delve into the David Cameron controversy and explore the murky world of lobbying:

It has emerged since the inquiry was ordered that top civil servant Bill Crothers was allowed to join Greensill Capital as an adviser in 2015 while still employed by the government.

It's a new twist in the story that's led Labour to accuse the Tory Party of "sleaze, cronyism and corruption".

But what exactly is the situation? Why did Mr Cameron feel the need to issue a 1,700 word statement? And why has Prime Minister Johnson ordered a probe?

What is Greensill Capital?Greensill Capital was founded by 44-year-old Australian Lex Greensill with the aim of “making finance fairer” and “democratising capital”.

The company, which set out to make it easier and faster for companies to pay their bills, filed for insolvency protection in March this year leaving Liberty Steel in a precarious situation.

Greensill was the main financial backer of Liberty Steel and its collapse has left the firm, which employs around 5,000 workers at a number of sites across the UK, facing an uncertain future.

The government had refused a £170 million bailout for Liberty, in part due to the “opaque” structure of the business and its parent company, GFG Alliance, a conglomerate owned by Sanjeev Gupta.

What are the claims against David Cameron?

There are numerous claims against the former PM, who served in Downing Street from 2010 to 2016, but all the allegations centre around his relationship with the Australian financier Mr Greensill.

An investigation by the Sunday Times alleged that Mr Greensill enriched himself through a government-backed loan scheme he designed after the then prime minister gave him access to 11 Whitehall departments and agencies.

The Sunday Times report alleged the Australian financier was given access to the departments while Mr Cameron was in No. 10 so he could promote a financial product he specialised in.

Political Correspondent Carl Dinnen explains who's who in the Greensill lobbying scandal:

He was also employed as an adviser in Downing Street on supply chain finance, though Mr Cameron claims to have only met him twice while prime minister.

The Pharmacy Early Payment Scheme, announced in 2012, saw banks swiftly reimburse pharmacists for providing NHS prescriptions, for a fee, before recovering the money from the government.

Greensill Capital went on to provide funds for the scheme.

Mr Cameron was employed by Lex Greensill as an advisor after he left Downing Street in the wake of the Brexit referendum in 2016.

In his new role, the former Conservative leader tried to persuade government figures to grant emergency loans to Greensill Capital.

Following newspaper reports, Chancellor Rishi Sunak was forced through a freedom of information request to reveal texts he sent responding to Mr Cameron's requests for government support.

Newspaper reports also revealed Mr Cameron had arranged a "private drink" between Health Secretary Matt Hancock and Mr Greensill to discuss a payment scheme later rolled out in the NHS.

Mr Cameron denies breaking any rules but accepts there are “important lessons to be learnt”.

Mr Greensill has not commented on investigations by the Sunday Times and Financial Times, but he is understood to deny making large returns from a pharmacy deal.

What is a lobbyist?

Lobbying is when an individual or a group tries to persuade someone in Parliament to support a particular policy or campaign.

Lobbying is, for the most part, perfectly legitimate and anyone can lobby their MP or a member of House of Lords. People who often lobby Parliament and its members include businesses, charities, pressure groups, trade unions and representatives of various sectors of industry.

But there are guidelines to prevent potential conflicts of interest that may arise,and to promote ethical and fair lobbying.

David Cameron helped Lex Greensill (pictured) of Greensill Captial get access to ministers. Credit: LinkedIn/Lex Greensill

The Office of the Registrar of Consultant Lobbyists was set up by Mr Cameron's government following the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014, in order to create and administer the statutory Register of Consultant Lobbyists.

The government’s intention behind the introduction of the Register was to enhance the transparency of those seeking to lobby Ministers and Permanent Secretaries on behalf of a third party.

In 2010, Mr Cameron said that lobbying was "the next big scandal waiting to happen".

Why has Boris Johnson ordered an inquiry?

Downing Street said Prime Minister Johnson wants the Cabinet Office-commissioned review to "establish the development and use of supply chain finance and associated activities in government, and the role Greensill played in those".

Mr Johnson called for the inquiry due to "significant interest" in the matter, his spokesperson said.

Senior lawyer Nigel Boardman will lead the inquiry and will have "access to the documents that he needs" for his probe, Downing Street said.

Mr Johnson told broadcasters on Tuesday that Mr Boardman had been given "pretty much carte blanche to ask anybody whatever he needs to find out."

"I would like it to be done quickly", he said, "but I want him to have the maximum possible access so we can all understand exactly what has happened, and that will of course be presented to Parliament in due course."

Pressed on why he had not set up a "full independent inquiry", the PM replied: "I have every confidence in Nigel Boardman, I think he has done an outstanding job, he has done a very good job on PPE (personal protective equipment) that I've been reading.

Boris Johnson explains why he's called for an inquiry and what he hopes it will learn:

"And I think we need to understand exactly what has been going on with this supply chain finance question and we will make sure that everybody gives him their time and he can set out his thoughts and arguments."

Mr Johnson's spokesperson said: "As you know, there is significant interest in this matter, so the prime minister has called for the review to ensure government is completely transparent about such activities and that the public can see for themselves if good value was secured for taxpayers money. "This independent review will also look at how contracts were secured and how business representatives engaged with government."

He added: "As you would expect, the prime minister wants this to be done thoroughly and he wants it to be done promptly. So you can expect a prompt return on this."

Asked whether Mr Johnson believed lobbying rules needed to be changed, the spokesperson said: "As you have seen from what we have announced today, the prime minister understands the significant public interest in this and wants to look at the issues raised and get more details. "But I think you can judge from his actions."

Pressed on whether he is attempting to "rough up a rival" with the review, Mr Johnson said: "I think people have got questions that they need to satisfy themselves about - including me - about how this supply chain finance stuff is meant to work.

"I don't think it is going on at present anywhere in Government but we need to understand exactly what the intention was, how it came about, and that is exactly what Nigel Boardman is going to do."

Have any other inquiries been ordered?

The Commons Treasury Select Committee has announced plans for its own probe, with other committees reportedly planning to do the same.

What does Labour say?

Labour said the review risks kicking the issue into the "long grass".

The party says the collapse of Greensill, putting jobs in the steel industry at risk, could have been avoided had the Conservatives supported changes to the Lobbying Act in 2014.

Proposals by Labour under the Act would have made it more difficult for Mr Cameron to “open doors” across Whitehall for the firm, the party claims.

The party said the amendments would have increased transparency and scrutiny around in-house lobbying, however they were voted down by Conservative peers.

Shadow chancellor of the Duchy of Lancaster Rachel Reeves said: "This has all the hallmarks of another cover-up by the Conservatives.

"Just as with the inquiry into Priti Patel's alleged bullying, this is another Conservative government attempt to push bad behaviour into the long grass and hope the British public forgets."We need answers on Greensill now - that means key players in this cronyism scandal like David Cameron, Rishi Sunak and Matt Hancock appearing openly in front of Parliament as soon as possible to answer questions."

How has the current government responded?

Aside from the inquiry ordered by the PM, many of Mr Cameron's former Tory colleagues have rallied around their former leader.

Culture Secretary Oliver Dowden defended his long-term ally, telling the BBC's Andrew Marr that Mr Cameron is a “man of utmost integrity and I’ve no doubt at all he would have behaved properly”.

A government spokesman said: “Lex Greensill acted as a supply chain finance adviser from 2012 to 2015 and as a crown representative for three years from 2013.

“His appointment was approved in the normal manner and he was not paid for either role.”

How has the government responded to the Greensill lobbying scandal? Carl Dinnen explains

Business Secretary Kwasi Kwarteng said the former prime minister “did absolutely nothing wrong” in his dealings with Greensill Capital.

Mr Kwarteng suggested everyone "move on" from the issue.

Asked about the prospect of an inquiry, he said: “I think there’s been a lot of transparency actually, there’s been a lot of information about what David Cameron… what he said, who he contacted within the Treasury. I think they’ve been very open about what’s happened and I think that lack of transparency, I don’t think, is a problem in this case.”

Mr Kwarteng added: “David Cameron, as far as I remember, was recruited in 2018, two years after he’d left Downing Street and I think that was (an) appreciable length of time.

“What we can’t do is go down the route of banning people from making a living, pursuing a profession, long after they’ve left political life.”

How has David Cameron responded?

A spokesperson for David Cameron has said he "will respond positively to all such requests" from inquiries "when the terms of reference of each inquiry are clear and any invitations to provide evidence are received.

"While he was an adviser to the business and not a Board director, he is keen to ensure that the lessons from it going into administration are learnt.”

It is the second statement from Mr Cameron in a matter of days after weeks of silence.

In a letter to the PA news agency on Sunday, the former PM accepted he should have communicated with the government “through only the most formal of channels” and acknowledged he made missteps over the lobbying controversy.

The former prime minister said on Sunday: “In my representations to government, I was breaking no codes of conduct and no government rules.”

He insisted however that no rules had been broken. He said that “ultimately” the outcome of his efforts to get Greensill’s proposals included in the government’s Covid Corporate Financing Facility (CCFF) 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,” he said.

He conceded, however, that there were "important lessons to be learnt."

Adding: "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."

Who is Bill Crothers and what's he got to do with it?

Bill Crothers is a former senior civil servant who was head of Whitehall procurement who was hired as a Greensill adviser while still working for the government.

He began working for the firm as a part-time adviser to the board in September 2015 and did not leave his role as Government chief commercial officer until November that year.

Mr Crothers has denied wrongdoing and says his appointment at Greensill Capital was approved by the Cabinet Office.

In a statement he said: “This advisory role was not seen as contentious, and I believe not uncommon.”

Bill Crothers was hired as a Greensill Capital adviser in 2015 while still employed by the government. Credit: Gov.uk

Jill Rutter, a senior research fellow at UK In A Changing Europe, said the revelation suggests the current rules governing second jobs for public servants are not working.

The former civil servant told BBC Radio 4’s Today programme: “Bill Crothers wasn’t just any civil servant, he was the head of a thing called the Crown Commercial Service which oversees all that government buying activity.

“You’d have thought that if anyone was in a sensitive role, and anyone is looking for them to advise them, he is in a very difficult position to take a role with an external company and manage to avoid the conflicts of interest.”

A Cabinet Office spokesman said the “wide-ranging” independent review into the financial firm, announced on Monday, will also consider the situation of Mr Crothers, who later became a director at Greensill.

Mr Crothers was still working as a civil servant when he took up the advisory role at Greensill, a move which he said was approved by a conflicts of interest policy and “supported by the Cabinet Office leadership”.

Ms Rutter said Mr Crothers seemed to have exploited a “loophole” in the rules which were an “obvious place for tightening up” in that he did not need Cabinet Office approval to take a job with Greensill as he had already been doing work for them while in the Civil Service.

She added: “It doesn’t look like the rules are working very well.”

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