Chancellor Rishi Sunak on Thursday defended the Treasury’s dealings with Greensill Capital, saying it was “entirely right” for senior officials to have 10 meetings with the supply chain finance company after lobbying by former prime minister David Cameron.
Sunak said Treasury work on proposals by Greensill for the company to secure access to a Bank of England Covid-19 loan scheme during the early months of the pandemic had not been influenced by how Cameron lobbied ministers and officials on 56 occasions.
“The identity of the person was not relevant,” the chancellor told the House of Commons Treasury select committee, which is investigating the collapse of Greensill last March. “It was worth doing the work and ultimately concluding we would not go ahead.”
Cameron, who was a paid adviser to Greensill, had pressed Treasury ministers and officials to change the rules around the BoE’s Corporate Covid Financing Facility to allow supply chain finance companies including Greensill to take part.
He also lobbied for the state-owned British Business Bank to lift the cap on the size of the loans available under the government’s Coronavirus Large Business Interruption Loan Scheme (CLBILS).
Although Cameron failed in these lobbying efforts, Greensill, which was an accredited lender for the CLBILS scheme, did go on to provide £400m worth of loans to companies.
Sunak said Treasury officials — who had meetings with Lex Greensill, founder of the supply chain finance group, and Cameron — had not spent a “disproportionate effort” on the company’s proposals, which had the potential to channel funding to small businesses.
“We spent the right amount of time on this situation to get to the right answer,” he added. “It was absolutely right to be looking at ways to provide finance and credit and liquidity to small and medium sized companies.”
Sunak said he did not know Cameron well and had not spoken to him since he stepped down as prime minister in 2016.
In April, the Treasury released text messages that Sunak sent to Cameron after being contacted by him about Greensill. “It was a surprise to receive the [first] message [from Cameron],” the chancellor told MPs on Thursday.
Sunak was asked about a text in which he told Cameron that he had “pushed” Treasury officials to explore an alternative to Greensill’s proposals that would have benefited the company.
The chancellor told MPs: “I wouldn’t read too much into that word, it’s just a turn of phrase synonymous with ask.”
Sunak said Greensill did not obtain more access to Treasury officials because of Cameron’s lobbying.
Mel Stride, Conservative chair of the committee, responded by saying: “It doesn’t seem credible that when a former prime minister is pushing something as vigorously as he did, you wouldn’t expect it to get a little more consideration than if it was someone who wasn’t known.”
Sunak expressed concern that the controversy about Cameron’s lobbying for Greensill could make policymaking “poorer” in future because it could deter executives or trade union leaders from approaching ministers.
“I’d imagine this whole thing might change the way people feel about engaging with government — let’s see,” he added.
“If every informal conversation is essentially a public interview, people might be more reluctant to share perceptive thoughts with ministers that might inform policy . . . if they think that can’t be private.”
Angela Eagle, a Labour member of the committee, responded by saying that transparency was “absolutely crucial” when it came to lobbying.
“I was quite shocked that you seem to be making the argument that transparency on these matters, or in this case, discovered by good investigative journalism, will actually worsen outcomes,” she told Sunak.