David Cameron pushed Bank of England and Treasury to risk €23bn to help firm

Former prime minister sent string of emails to officials and argued company should be a priority for public funding

David Cameron    expressed frustration at the refusal of public officials to provide huge support to finance firm Greensill which later collapsed. File photograph: JUSTIN TALLIS / Getty

David Cameron expressed frustration at the refusal of public officials to provide huge support to finance firm Greensill which later collapsed. File photograph: JUSTIN TALLIS / Getty

 

Former British prime minister David Cameron repeatedly pushed the Bank of England and the UK Treasury to risk up to €23 billion in taxpayer cash to help Greensill Capital, just as the lender started to face “significant” financial pressure at the start of the pandemic.

The UK’s central bank was urged to provide support to Greensill, including by setting up a fund that would buy loans made by the financial services company and its competitors, in a string of emails to senior officials.

In one, Cameron introduced Greensill’s founder to one of the Bank of England’s four deputy governors, Jon Cunliffe.

The exchanges, published by the Bank of England on Thursday afternoon, became increasingly desperate in tone as requests from Greensill for government backing were turned down.

Cameron described the situation as “incredibly frustrating” and complained: “I must be missing something here.”

Late on Thursday, the Treasury released details of a call between Cameron and John Glen MP, the economic secretary to the Treasury. In it, Cameron is said to have argued that supporting Greensill would be “the most effective” way to help the small and medium businesses that relied on it for finance.

The Treasury has also released new text messages between Cameron and Glen, where Glen says the Treasury had decided not to extend the funding to Greensill, but offers a “private call” to explain the decision.

The Treasury said it would not be releasing Cameron’s texts to Glen, because of his expectation of privacy.

The disclosures underline the concerted efforts made by Cameron to promote Greensill - approaching ministers, civil servants and officials - over a period of weeks.

The Bank of England correspondence, released as part of a freedom of information request, shows for the first time the pressure that the former prime minister and his colleagues exerted on central bank officials.

At the time, Greensill was attempting to lobby for access to the government’s largest Covid-support scheme, the Covid corporate financing facility (CCFF), which Greensill ultimately did not quality for.

Cameron and Greensill’s founder and chief executive, Lex Greensill, contacted the bank at least seven times in March and April 2020, even corresponding with officials during weekends, after gaining direct access to Cunliffe, who is the bank’s deputy governor for financial stability.

Greensill, a supply chain finance specialist, collapsed in February after an Australian insurer refused to renew guarantees underpinning billions of dollars of loans it had made to customers.

Those loans, for which Greensill collected a fee from the borrower, were then bundled up and sold on to other investors.

The arrangement was described as a “Ponzi scheme” by MPs on Thursday, as they grilled Treasury officials as they opened their inquiry into the Greensill lobbying scandal. - Guardian