Chancellor called to explain Greensill loan access
Rishi Sunak has been called to face parliament
Chancellor Rishi Sunak has been asked to explain to parliament why he granted Greensill Capital access to a COVID loan scheme after David Cameron lobbied him.
The latest move in the controversy surrounding the former Prime Minister came after Prime Minister Boris Johnson ordered an independent review into the now-collapsed finance firm’s activities in government and the role its founder, Lex Greensill, played.
Mr Sunak last week released text messages he sent to Mr Cameron in April last year in which he said he had “pushed” his officials to explore how to help Greensill Capital access to COVID Corporate Financing Facility (CCFF).
The chancellor does not have to appear in parliament himself and a Treasury minister is expected to stand in for him.
Labour’s shadow chancellor Anneliese Dodds was granted the urgent question summoning the Chancellor to explain the process by which Greensill Capital was accredited as a lender for the Coronavirus Large Business Interruption Scheme (CLBILS) in June 2020.
That decision allowed the lending firm to issue state-backed loans of up to £50 million, with media reports suggesting that eight such loans, totalling £400 million, were issued to Sanjeev Gupta’s GFG Alliance group of companies.
Greensill’s collapse has plunged GFG into financial crisis, putting 5,000 jobs at risk in across its UK operations, including 3,000 at Liberty Steel.
Greensill Capital was the only supply chain finance firm approved to administer the CLBILS scheme. The Treasury has admitted it was not regulated by the FCA or the PRA or subject to the capital adequacy and stress tests that applied to other lenders on the scheme to protect public money.
Ms Dodds said: “The Chancellor can’t keep ducking scrutiny of his decision to put hundreds of millions of pounds of taxpayer money in the hands of an unregulated lending firm with links to a former Conservative PM.
“That’s why we have asked him to come to Parliament to explain himself.
“We need to know what he “pushed” his officials to do to help Greensill access one of his Covid loan schemes. And we need to know why he then simply opened the door for them to lend through another one.
“Public money was put at risk by the Conservatives’ crony connections to Greensill Capital. That’s why we urgently need a full, transparent and thorough investigation into this affair.”
See also: Ewing caught in eye of Greensill storm