Boris Johnson has admitted it is not clear whether the “boundaries” between Whitehall and business have been “properly understood” as Labour claimed the Greensill row marks the return of “Tory sleaze”.
The Prime Minister said an inquiry led by lawyer Nigel Boardman would examine the situation after it emerged the Government’s former procurement chief had worked for Greensill Capital while still employed as a civil servant.
Meanwhile senior Tory William Wragg said former prime minister David Cameron’s lobbying for the collapsed lender was “tasteless, slapdash and unbecoming” and indicated his cross-party Public Administration and Constitutional Affairs Committee could investigate the row.
The Treasury Select Committee will also examine the regulatory lessons from the collapse of Greensill and Chancellor Rishi Sunak’s department’s response to lobbying by Mr Cameron.
The Government saw off an attempt by Labour to establish a separate parliamentary inquiry into the Greensill affair, which could have seen Mr Cameron and ministers including Mr Sunak and Health Secretary Matt Hancock forced to give evidence in public.
As well as Mr Cameron’s efforts to secure funding for the lender from a coronavirus bailout scheme, the affair has raised questions about a “revolving door” between Whitehall and the private sector.
Senior civil servant Bill Crothers began working for Greensill 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.
At Prime Minister’s Questions, Mr Johnson said he shared the “widespread concern about some of the stuff that we’re reading at the moment”, and Cabinet Secretary Simon Case also had concerns.
“I do think it is a good idea in principle that top civil servants should be able to engage with business and should have experience of the private sector,” Mr Johnson said.
“When I look at the accounts I’m reading to date, it’s not clear that those boundaries had been properly understood and I’ve asked for a proper independent review of the arrangements that we have to be conducted by Nigel Boardman, and he will be reporting in June.”
Labour leader Sir Keir Starmer repeatedly questioned Mr Johnson about the row, saying an “overhaul of the whole broken system” was needed.
“The Greensill scandal is just the tip of the iceberg,” he said.
“Dodgy contracts, privileged access, jobs for their mates, this is the return of Tory sleaze.”
He said financier Lex Greensill was brought into the government as an adviser by Mr Cameron, before hiring the former prime minister to act as a lobbyist contacting Cabinet ministers including the Chancellor and Health Secretary.
“And now, even more unbelievably, we know the government’s head of procurement, no less, became a Greensill adviser while he was still a civil servant,” Sir Keir said.
There was a “revolving door, indeed an open door, between this Conservative government and paid lobbying”.
In a reference to hit police corruption TV show Line Of Duty, Sir Keir said: “The more I listen to the Prime Minister, the more I think Ted Hastings and AC-12 is needed to get to the bottom of this one.”
Mr Johnson insisted “we’re getting on with rooting out bent coppers”.
The Prime Minister insisted the Tories had been “consistently tough on lobbying”.
Mr Wragg, chairman of the influential Public Administration and Constitutional Affairs Committee, said Mr Cameron’s activities were “no doubt a tasteless, slapdash and unbecoming episode for any former prime minister”.
He said his committee “is and will be giving these matters proper consideration” and it is something “I am more than happy to take up as the AC-12 of Whitehall”.
Labour’s motion calling for a separate committee to be established was defeated by 357 votes to 262, majority 95.
The Opposition also criticised the appointment of Mr Boardman, whose father was a Tory minister, to lead the inquiry established by Mr Johnson.
He is pausing his role as a non-executive director of the Department for Business, Energy and Industrial Strategy and will be unpaid for his work on the inquiry.
But Sir Keir said law firm Slaughter and May, where Mr Boardman is a senior consultant, had “lobbied to loosen lobbying laws”.
Shadow Cabinet Office minister Rachel Reeves said “it’s a fact that Nigel Boardman is a very good friend of the Conservative Government” and “what is being proposed by the Government is not remotely fit for purpose”.
“It’s not an inquiry, it’s not independent, it’s an insult to us all,” she said.
Downing Street said Mr Boardman was a “distinguished legal expert” and “an independent reviewer”.
The Prime Minister’s official spokesman said: “He was asked to lead this review independently, he has been asked to do it thoroughly and promptly, and we trust him to do that.”