Labour calls for new laws to tackle Westminster cronyism

New laws should be introduced to stop cronyism in the lobbying of the Government, Labour has said.

Leeds West MP and Shadow Chancellor of the Duchy of Lancaster Rachel Reeves has said today laws must be tightened in the wake of the continuing controversy over David Cameron’s activities on behalf of the collapsed finance company Greensill Capital.

And she said a Labour Government would set up a taskforce to tackle cronyism in Westminster.

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It comes after it emerged former Prime Minister Mr Cameron had used his contacts to lobby Chancellor Rishi Sunak for support Greensill, one of the major financiers for Liberty Steel, through the Government’s Covid Corporate Financing Facility.

Shadow Chancellor of the Duchy of Lancaster, Rachel Reeves pictured with Labour party leader Sir Keir Starmer during a visit to Chelsea and Westminster Hospital, London. Photo: PA

Under the existing rules, Mr Cameron did not have to make a declaration when he went to work for Greensill after leaving office as he was not an outside “consultant” lobbyist.

But Ms Reeves said ministers should include legislation in next month’s Queen’s Speech to expand the register of lobbyists to cover so-called “in house” lobbyists like the former Prime Minister.

Greensill’s application for help was rejected by officials and the firm subsequently filed for insolvency, putting at risk thousands of steelmaking jobs in the UK and rendering Mr Cameron’s reported tens of millions of share options worthless.

Ms Reeves said: “Given the cronyism consuming the Conservative party, it’s crucial that the scope of the lobbying register is expanded to include in-house lobbyists.

“Otherwise it’s clearly one rule for them, and another for everyone else.

“The former Conservative Prime Minister’s conduct and the immense access Greensill was given illustrate perfectly both the toothlessness of current rules, and Tory ministers’ complete disregard for any self-driven integrity when lobbying.

“A Labour government would create an integrity and ethics commission to restore transparency and accountability back into the heart of government, introduce a fairer framework for commercial lobbying, stamp out crony contracts while freeing up civil society to campaign.”

The Sunday Times reported yesterday that a cache of leaked emails showed how Australian Lex Greensill told officials in 2012 that “the PM” had requested that he implement his ideas “across government”.

He was said to have sent his proposed loan plan for NHS pharmacies to senior officials but was so confident he told them: “We are not seeking your approval”.

The latest disclosures will add to the pressure on Mr Cameron who brought Mr Greensill into No 10 as an unpaid adviser on supply chain finance.

After leaving office he then went to work as an adviser for Mr Greensill’s firm.

According to the latest disclosures, civil servants were so alarmed by Mr Greensill’s proposals for a system of supply chain finance – fast-tracking funds vulnerable to late payments – they warned it could leave the Government open to “legal challenge”.

One official described him as a “semi-private sector agent”, adding: “Rein him in – stop him approaching departments unilaterally.”

The paper said that a deal was reached with Mr Greensill’s former employer Citigroup to run the scheme for pharmacies without a tender.

The financier was said to have shocked officials by writing that there was “no formal contract with Citigroup”, adding “this situation is entirely normal in the private sector”.

Neither Mr Cameron nor Mr Greensill has commented publicly over any of the claims that have appeared in recent weeks.

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 including registering any potential conflicts of interest.

“There are robust processes in place for the award of government contracts. The pharmacy early payment scheme, which benefits over 2,000 pharmacies, was initially financed through the government banking service as part of its portfolio of services for government departments.

“Following an open competition in 2018, the service has been provided through a direct contract with Taulia Inc, with no additional cost to the taxpayer.”