Labour wants an investigation into whether former prime minister David Cameron lobbied for a specialist bank that has since gone bust to handle extra Government-backed Covid loans.
Greensill Capital, a group that lends money to businesses so they can pay their suppliers and counted Mr Cameron among its advisers, filed for administration last week.
According to the Financial Times, Mr Cameron, before it collapsed, personally intervened to try to increase Greensill’s access to Government-backed Covid-19 emergency loan schemes.
The newspaper reported that Greensill wanted to have its cap lifted so it could lend up to £200 million as part of the Coronavirus Large Business Interruption Loan Scheme (CLBILS), increasing its limit of £50 million at the time.
Reports that David Cameron met with the Chancellor and Treasury officials to lobby for Greensill to gain access to Covid-19 loan schemes raise extremely serious questions.— Anneliese Dodds 💙 (@AnnelieseDodds) March 18, 2021
The Government must leave no stone unturned with a full and thorough investigation.https://t.co/EIjY4MqBHb
The Treasury said it had turned down the request to change the rules around access to the Bank of England’s Covid Corporate Financing Facility (CCFF).
Shadow chancellor Anneliese Dodds said a probe should be undertaken to “leave no stone unturned” in getting to the bottom of why “it appears Greensill was given so much access to the Treasury”.
“These revelations raise extremely serious questions about the Chancellor’s priorities in the middle of a pandemic,” said the senior Labour MP.
“The Government must leave no stone unturned with a full and thorough investigation into this.
“Taxpayers and businesses deserve answers about why it appears Greensill was given so much access to the Treasury at a time when the Chancellor was refusing to engage with groups representing the millions of people he excluded from wage support.
Set record straight
“The Chancellor must urgently set the record straight.”
Downing Street declined to say whether Mr Cameron lobbied his former university colleague Prime Minister Boris Johnson or a special adviser in No 10.
A No 10 spokesman said: “Senior officials and ministers routinely meet with a range of private sector stakeholders.
“During the Covid pandemic the Government received many representations from the entire spectrum of British business.
“HM Treasury considered the representations made by the company with proper and due process and the decision was taken not to provide the support requested.”
A Treasury spokesman said: “Treasury officials regularly meet with stakeholders to discuss our economic response to Covid.
“The meetings in question were primarily about broadening the scope of CCFF to enable access for providers of supply chain finance, which – following a call for evidence and discussions with several other firms within the sector – we decided against and informed the businesses concerned.”
Greensill Capital was the main lender to Sanjeev Gupta’s GFG Alliance which includes Liberty Steel – the owner of steel plants across the UK.
Mr Gupta’s business empire employs around 5,000 people in the UK, a majority of whom work for Liberty Steel across its 11 sites throughout England, Scotland and Wales, including Scunthorpe, Newport and Rotherham.