In British Politics, ‘Sleaze’ Isn’t the Exception – It’s the Rule

The Greensill scandal isn't a story about a few bad apples, it reveals how British capitalism works – politicians using state power to enrich private corporations while the public picks up the tab.

The Labour Party has—relatively late in the day—decided to mount a series of attacks on Tory ‘sleaze’. On the surface, this looks like an easy win for Keir Starmer: using the cronyism line allows him to criticise the government without issuing any fundamental challenge to the British political economic model. The system, Labour can argue, is ‘dirty’ – what is needed is a lawyer in shining armour to clean things up.

Unfortunately, the late and limited ways in which the party has decided to attack the Conservatives may end up causing more harm than good. By individualising the problem—and, relatedly, calling it ‘cronyism’ or ‘sleaze’ rather than corruption—Starmer can avoid criticising the status quo. But he also leaves himself open to the question: why would you be any better?

Take the Greensill scandal. Greensill Capital was a firm that offered ‘supply chain finance’ – effectively, the company acted as an intermediary between sellers and buyers, providing financing that allowed sellers to receive payments sooner and customers to make those payments later.

Greensill was something like a ‘shadow bank’—a financial institution that operated outside of national regulatory frameworks—which made it an inherently risky enterprise. As Adam Leaver explains in this piece, Greensill ended up using creative accounting techniques to increase its lending beyond sustainable limits, without regulatory oversight.

As some keen-eyed observers have been pointing out for months, Greensill was a house of cards waiting to collapse. It only managed to stand for so long—and grow to such huge proportions—as a result of the staggering amount of very cheap money circulating throughout the global economy in recent years, much of which has flowed into ‘tech’. Greensill—like WeWork before it—managed to disguise what was a fundamentally boring, if risky, business model as an exciting new tech venture, attracting large amounts of capital in the process.

One person taken in by this image was the UK’s former Prime Minister, David Cameron. As has been revealed in recent weeks, Cameron has had a longstanding relationship with the eponymous founder of Greensill, who offered a variety of consulting and advisory services to the Cameron government. In 2018, Greensill returned the favour and offered Cameron an advisory position, and stock options, at Greensill.

The current scandal was triggered by revelations that Cameron lobbied multiple government ministers, including Rishi Sunak, to allow Greensill Capital to participate in the Bank of England’s emergency lending scheme. The Bank has lent out over £37 billion through the Covid Corporate Financing Facility (CCCF) by purchasing the short-term debt of large firms as part of its remit to promote financial stability. Greensill was denied access to the CCCF, and Cameron claims to have followed the letter of the law but is also the subject of multiple investigations.

It later emerged that Cameron had arranged a meeting between Greensill and the then Health Secretary Matt Hancock—himself the subject of concerns over the distribution of government contracts during the pandemic—to lobby Hancock to ensure the NHS would procure services from the company. This endeavour was more successful – many NHS trusts use Greensill’s Earnd app, which allowed NHS employees to draw down their salary before they were paid.

There are many more twists and turns to this story, and information as to who Cameron lobbied at what time and in what capacity is still emerging. Other figures, from Hancock to the chair of NHS England, have also been forced to account for their actions in their relationship with the firm.

The Labour Party has finally realised that the stench of corruption emanating from this Conservative government is so strong that Starmer can call it out without rocking too many boats. If the Telegraph is criticising the former Prime Minister, then that’s a sure sign Keir Starmer will feel able to do the same.

There’s just one problem – the Labour Party doesn’t emerge from the scandal squeaky clean either. John Healey also lobbied for Greensill’s inclusion in the CCCF in a bid to protect a company in his constituency being backed by Greensill. As Gabriel Pogrund revealed this week in the Times, Tony Blair met Lex Greensill on multiple occasions to discuss a potential ‘project’. And the Telegraph has reported that one of Starmer’s key allies is a partner at a law firm that also lobbies on behalf of Greensill.

None of these allegations are remotely as serious as those levelled against Cameron, but the distinction is likely to be missed by a population already convinced that politicians are all the same – untrustworthy and corrupt. The Conservative Party’s media machine is clearly much more effective than Labour’s, and those voters paying attention are likely to leave this scandal with the impression that both sides are just as bad as each other.

The ‘both sides’ argument was always going to present a challenge to Starmer’s ‘cronyism’ attack. If the problem is ‘bad people’ on one side, then why should voters believe that there aren’t an equally significant number of bad people on the other side?

This has always been an issue with the labourism of the Labour right, who believe themselves to be the ‘good guys’ simply because they are the Labour Party. They have always been convinced that their role is to offer the same fundamental approach as the Conservative Party, but with a little more redistribution and a little less racism – or, in this case, a little less sleaze.

But this line is just as unconvincing today as it has been since Labour was last in power. The only reason Labour was able to increase its vote share to such a significant extent in 2017 is that the Party offered an alternative to a country sick of being forced to choose between the lesser of two evils.

There could be a way to use this scandal against the Conservative Party, but it would depend upon Starmer’s ability (and willingness) to issue a fundamental challenge to the status quo.

Why has the Bank of England been able to distribute millions of pounds to private corporations while the nurses risking their lives to save ordinary people during this pandemic have been offered a pathetically small pay rise? Why are those workers so desperate for cash that they need access to a financial app that allows them to access that money early? And why do public institutions continue to rely on unreliable and expensive private companies to provide services that could be undertaken in-house?

The scandal exposed by the Greensill saga isn’t a few bad eggs at the top of the state, it’s that all of our political and economic institutions work in the interests of capital rather than working people. The solution to that challenge—a solution that the Labour Party could actually offer—is to democratise these institutions so that working people have a fighting chance to defend their interests within them.

Unfortunately, the people backing Starmer are terrified of giving working people the power to take control of their own lives. Their entire project has been to return Labour to its old ways as a narrow Westminster machine. And that makes sense – after all, how could Labour pitch itself as the good party saving the country from the nasty Tories if working people were already organised to defend their interests themselves?