David Cameron and Greensill: What's it all about?

Labour has called for more examination of David Cameron's dealings with the man behind a recently collapsed finance firm.

Financier Lex Greensill worked as an unpaid adviser to Mr Cameron when he was prime minister, and developed a policy designed to ensure small firms got their bills paid faster. The scheme also benefited Mr Greensill's own company, Greensill Capital.

Mr Cameron went on to work for Greensill Capital after leaving office, and tried unsuccessfully to lobby the government to increase the firm's access to government-backed loans.

Mr Cameron pressed Treasury officials - including reportedly sending Chancellor Rishi Sunak text messages - for emergency funding for Greensill Capital, a company in which the former prime minister had a financial interest.

Mr Cameron is reported to have told friends he was set to earn as much as £60m from shareholdings in Greensill, where he had worked since 2018.

In the end, Mr Cameron's pleas to the Treasury for emergency loans for Greensill Capital, fell on deaf ears.

The firm has now gone bust, throwing the future of thousands of workers at Liberty Steel, a company backed by the finance house, into doubt.

Mr Cameron didn't appear to do anything wrong, under the current rules.

Big business is always keen to fork out for the influence and contacts a big hitter like Mr Cameron - who stood down as prime minister in 2016 - can supposedly offer.

There is nothing illegal about this kind of lobbying, although critics say it needs to be brought out into the open.

There are rules - some drawn up by Mr Cameron himself - aimed at preventing abuses, but critics say they do not go far enough.

Although Mr Cameron was cleared by a watchdog of breaking lobbying rules, a Sunday Times investigation has shed new light on his dealings with Mr Greensill when he was prime minister, in the early days of the Conservative/Lib Dem coalition.

In 2012, Mr Greensill was made an unpaid government adviser by Mr Cameron, with a Westminster pass and access to government departments.

He used this access to promote a government-backed loan scheme he had devised.

Mr Cameron and the late Lord Heywood, the most powerful man in the civil service at the time, were fully behind it, believing it would help to deliver on a promise to speed up payments to small firms.

But Mr Greensill also stood to make a lot of money from the scheme, even though the Sunday Times claims many in Whitehall had serious reservations about it.

Mr Greensill's specialism was supply chain finance - a service for companies who don't want to wait months for their bills to be paid.

For a small fee, the finance company pays the seller as soon as the goods are delivered, and get its money back when the bills are eventually paid by the customer.

Mr Greensill helped to convince the UK government to set up a supply chain finance scheme for pharmacies - paying them early for money they were owed by the NHS. In 2018, Greensill Capital won the contract to run it.

Mr Greensill turbocharged this unglamorous corner of finance by packaging and selling the debts to bigger investors.

In the process, he built a global company, at one point valued at $7bn (£5bn), with a fleet of four private jets.

Questions had been asked before about the sustainability of Greensill's business since at least 2018.

But the final blow came last July when one of its insurance companies withdrew cover that protected some of Greensill's investors.

Liberty Steel, Britain's third-largest steel producer employing 3,000 people in England, Scotland and Wales, was receiving financial backing from Greensill.

Its future is now in doubt.

The relationship between those at the top of government and big business has never been under more scrutiny, following questions over the way Covid contracts were awarded.

Critics argue that it is too easy for ministers and top civil servants to use their insider knowledge of Westminster to enrich themselves when they leave government. The danger is that decision-makers could have one eye on their next pay day, rather than the best interests of the country.

In 2010, Mr Cameron warned that the "the far-too-cosy relationship between politics and money" was "the next big scandal waiting to happen".

There is also a question of access. Who gets time with ministers to push their cause?

There are thousands of lobbyists - from trade unions to environmental groups to multinational companies - why do some people appear to get favoured treatment?

Labour wants a full inquiry into how Mr Greensill was given access to the heart of government.

The Committee on Standards in Public Life has said it can't investigate individual cases, so it may fall to a select committee if it happens at all.