The most senior official in the UK Treasury has admitted he was one of the many senior government figures lobbied directly by David Cameron on behalf of Greensill Capital as the first of eight inquiries into the scandal opened on Thursday.
Sir Tom Scholar, permanent secretary at the finance ministry, told the House of Commons public accounts committee (PAC) that he had received a phone call and some text messages from the former prime minister. Cameron was asking for changes to Covid-19 loan schemes to the benefit of the doomed finance company, which collapsed into administration last month.
Scholar admitted that Cameron had his phone number because “I used to work for him” when he was in Downing Street. “When somebody you know asks to speak to you, it’s quite natural to take that.”
He added: “If a former minister I’ve worked with asked to talk to me, I would always do that.”
Scholar said the Treasury was approached “quite persistently” by the company but ultimately resisted its approach.
“We listened to what they said, we analysed it, we tested it, and in the end despite them submitting a series of successful proposals we decided to reject them all,” he said.
The Financial Times first revealed last month that Cameron directly lobbied senior figures in the Treasury and Downing Street on behalf of Greensill. It has since emerged that they included three ministers in the Treasury — including chancellor Rishi Sunak — and a special adviser in Number 10.
The scandal has triggered eight inquiries from groups, including the National Audit Office, which monitors government spending, the PAC and the head of the civil service.
Scholar told the MPs on the Commons committee on Thursday that he did not have a detailed policy discussion with Cameron. Instead, he handed over the issue to his deputy Charles Roxburgh, who told the committee he had nine calls with the company between March and June last year.
He also disclosed that the discussions involved both Lex Greensill, the former Morgan Stanley banker who founded the eponymous company, and Bill Crothers, former head of UK government procurement who left to work for Greensill.
The identity of the Greensill executives who took part in the calls was previously redacted in the Treasury’s response to the FT’s freedom of information requests, despite their seniority.
Roxburgh told the PAC that the Treasury discussed three separate proposals put forward by Greensill but rejected all of them in the end. Although the company did end up gaining access to a separate loan scheme called CLBILS that was run by the British Business Bank, he pointed out. The state-owned bank comes under the control of the business department.
Sir Geoffrey Clifton-Brown, a Conservative committee member, asked Roxburgh why the Treasury spent “so much time” investigating the potential for Greensill’s “dodgy” proposals.
Roxburgh replied that Greensill’s proposal, “had it proved workable, could have been a way to support a large number of small businesses at a time of crisis. That was appropriate to look at.”
The mandarin said it was an “extraordinary time” and that it was appropriate for him to talk to many companies to do his job properly. He said it was not reasonable for Treasury officials to have “perfect foresight” about the fact Greensill Capital would fall into administration in March 2021.
On April 8, the Treasury released two text messages sent by Sunak to Cameron during the period, which showed that the chancellor had urged officials to explore some of Greensill’s proposals.
One message, sent on April 23, said Sunak was “pushing” officials to see whether a way could be found to admit Greensill to the Bank of England’s Covid Corporate Financing Facility. “No guarantees, but the bank are currently looking at it and Charles should be in touch,” it said. “Best, Rishi.”
But Roxburgh told the committee he was merely following normal process by having so many engagements with Greensill. “I did not feel under any inappropriate pressure or pushing from the chancellor or economic secretary,” he said.