Boris Johnson 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”.
Ministers and the Civil Service have been dragged into the row over Greensill Capital’s links with Government and former prime minister David Cameron’s lobbying for the financial firm.
Labour’s calls for a parliamentary inquiry intensified after it emerged that the former head of Whitehall procurement became an adviser to Greensill Capital while still working as a civil servant, in a move approved by the Cabinet Office.
Bill Crothers 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.
“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 challenged Mr Johnson about the row at Prime Minister’s Questions.
He said financier Lex Greensill was brought into the government as an adviser by Mr Cameron, before then hiring the former prime minister to act as a lobbyist contacting Cabinet ministers including Chancellor Rishi Sunak and Health Secretary Matt Hancock.
There was a “revolving door, indeed an open door, between this Conservative Government and paid lobbying”.
The Prime Minister insisted the Tories had been “consistently tough on lobbying”.
But Sir Keir questioned the choice of Mr Boardman to lead the inquiry because he worked for a law firm “which lobbied to loosen lobbying laws”.
Labour will force a Commons vote later on establishing a parliamentary committee to examine the row, which would involve ministers and Mr Cameron being forced to answer questions in public.
Sir Keir said 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.”
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”.