politics

How did the UK’s most powerful civil servant fall for Lex Greensill? | Andy Beckett


Jeremy Heywood was always a bit of a mystery. Even by the opaque standards of the British state, the motivations of the late cabinet secretary and the enormous power he wielded in Whitehall – from 1997 until shortly before his premature death in 2018 – are hard to explain completely. For four successive prime ministers, he was a fixer, confidant, crisis manager, peacemaker, policy assessor and key contact with the outside world. For the civil service as a whole, he was a dominant figure: seemingly ubiquitous, forever laying out in his quick, soft voice exactly how things should be done. Often, this was not how they had been done before.

In February, his widow, Suzanne Heywood, published a memoir about him, What Does Jeremy Think? Jeremy Heywood and the Making of Modern Britain. There are quotes from all the prime ministers he worked with on the back cover. “The words ‘civil servant’ seem too dry to describe greatness,” gushes Tony Blair. Yet despite being more than 500 pages long, and full of sometimes revealing personal and Downing Street details, the book leaves intriguing gaps. There is little about Heywood’s political beliefs – or why he appeared to lack them, despite his era’s increasing ideological polarisation. And there is nothing about the controversial Australian financier Lex Greensill, whom Heywood reportedly brought into David Cameron’s administration as an adviser, and seems to have energetically supported despite widespread opposition from Whitehall.

The Greensill scandal broke just weeks after What Does Jeremy Think? was published. The book had received admiring reviews, seemingly cementing Heywood’s status as a hero of the retreating centrist establishment, the kind of supposedly neutral and deft civil servant who might have reined in the crude Brexiters now running the country. Since then, his role in this growing scandal – in the blurring of boundaries between Conservative governments, corporate interests and the civil service – has become of great interest to the media and multiple official inquiries. For others involved in the scandal, he may turn out to be a very convenient fall guy. For a Tory party that has often treated the civil service with contempt, the destruction of Heywood’s reputation, after he did so much to keep their inept recent governments functioning, would be a characteristic piece of opportunism.

Yet it’s possible to find that prospect distasteful while also believing that Heywood’s dealings with Greensill need probing. Already, the scandal and Heywood’s career tell us a lot about the British state since the 1990s. For anyone who believes that the civil service should be confident, independent and well-resourced – or that mandarins such as Heywood are actually impartial – the story is not reassuring.

One of the actions that first made his reputation was a review of the Treasury, where he then worked, which he was asked to lead in 1994. John Major’s Conservative government was looking for cuts and Heywood provided them, suggesting that senior Treasury posts be reduced by “around 30%” and that some of its work be given to the private sector. This willingness to try to make austerity work, and to involve business in government, became consistent themes in Heywood’s supposedly pragmatic career. And this was not just him giving Tory and New Labour ministers what they wanted. “He can’t stand waste,” someone who worked with him under Blair told me, when I wrote a profile of Heywood in 2016. “He’s like one of those time and motion men from the 60s: you can imagine him going round with a clipboard.”

Like many high flyers of his generation, Heywood also venerated the private sector. He adopted business language and assumptions. “Ministers are customers for our advice,” he would say. Whitehall reports were “product”. He also sought to hire or collaborate with people from business. Suzanne Heywood says he saw them as “unencumbered by civil service history”, and therefore able to “accelerate change in Whitehall”. She herself had left the civil service to become a management consultant, and in 2003 he left too, spending four years at the US bank Morgan Stanley. When he closed his first big deal for them, she records, her usually calm husband was “exhilarated”.

Morgan Stanley was where he met Greensill, who was working there as well. The young Australian banker reportedly impressed him. When Heywood resumed his career in Whitehall, they stayed in touch. In 2011, with Cameron’s austerity programme forcing the civil service to save money in new ways, and Greensill offering what he claimed was a way for the state to make its procurement policies more efficient through supply-chain finance, Heywood seems to have swiftly created a privileged position for him in government.

Some of the emails that Heywood appears to have written to his subordinates on Greensill’s behalf do not read well, in the light of the collapse of the Australian’s company last month. One from 1 August 2011 says: “Lex and I have been working on this [supply-chain finance] stuff off and on for five years … He is quite keen to … come and work for us … [I] really do not want to let this opportunity pass by.”

Greensill’s supply-chain finance system was not widely adopted by the Cameron government. But in 2017, Heywood successfully nominated Greensill for a CBE for “services to the economy”. Last week, a senior Whitehall contemporary of Heywood’s said, cuttingly, of his relationship with Greensill: “He was perhaps a bit naive.” Last month, Suzanne Heywood felt obliged to state that her husband “was not personally involved in and took no personal benefit of any sort from Lex’s company”.

One lesson of this inglorious episode in Heywood’s long career may be that a single civil servant, however brilliant, can get involved in too much. A former colleague of Heywood’s told me in 2016, “Jeremy would quite often think he could do things better than someone else.” He was not an easy person to like if you had reservations about Whitehall. When I interviewed him in his grand office, off the record at his insistence, he was outwardly civil and modest, but a bit patronising underneath. In 2012 he told MPs: “There’s a lot of rhetoric in the newspapers, but the business of government goes on.”

But thanks to a decade of Conservative rule, the business of government has now changed so much that big business and government are often indistinguishable. Because “his heart was still in the civil service”, as Suzanne Heywood puts it, Jeremy Heywood couldn’t – or perhaps wouldn’t – see the dangers. Sometimes the people who are most committed to an institution, who will do almost anything to preserve it, are the ones who inadvertently betray it.



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