Wednesday 31 March 2021 / 1:51 PM Anneliese Dodds / Rachel Reeves

Labour ramps up calls for investigation into Greensill affair

Labour has intensified its calls for the Cabinet Office to launch an investigation into the Conservatives’ links with Greensill Capital.

It follows the emergence of a business card dating from 2012 naming Lex Greensill as a ‘Senior Advisor’ to then Prime Minister David Cameron’s office, and reports that a former senior civil servant broke lobbying and transparency rules when moving to work for the lending firm.

Further reports have lifted the lid on the growing use within Government of the type of shadow banking championed by Lex Greensill, sounding the alarm about the potentially dangerous systemic risk to the public service and the additional cost to taxpayers.

According to Labour analysis, Greensill Capital may have made £19 million from the £30 million Government contract it was awarded to provide supply chain financing for NHS pharmacists in 2018 – two years after the former head of UK Government procurement became a director at the company.

The contract opened over a billion pounds a year in pharmacy invoices to the lending firm and its technology partner Taulia. Greensill earned income on every one of those invoices by charging the pharmacies costs for advance payment.

In a letter to the Cabinet Secretary Simon Case, the Shadow Chancellor of the Exchequer, Anneliese Dodds MP and Rachel Reeves MP, Labour’s Shadow Chancellor of the Duchy of Lancaster, ask for a full, transparent and thorough investigation to be launched into Greensill’s links with the Conservatives.

Questions which the Conservative Government is urged to answer include:

  • Whether Simon Case is planning to launch a full, transparent and thorough investigation into the decision to accredit Greensill Capital for the Coronavirus Large Business Interruption Loan Scheme, potentially putting hundreds of millions of pounds of taxpayer money at risk, and the role Mr Cameron played ahead of that decision?
  • How much Greensill Capital earned from the supply chain financing scheme for NHS pharmacists it was awarded by the Government, which opened over a billion pounds a year in NHS pharmacy invoices to the lending firm?
  • Why, after the failure of one supply chain finance contract with Greensill Capital, did the Cabinet Office put out to tender a much larger and more comprehensive supply chain finance contract, and whether this was opened to rival payments firms?
  • What was the scope of work which Lex Greensill was given as a Crown Representative and can the written details of this be published in the public interest?
  • Why was Lex Greensill’s six-month role exploring supply chain financing for the Government not announced internally or publicly?

Anneliese Dodds MP, said:

“These revelations raise further questions about the special access provided to the heart of Government for Greensill and its linked companies.

“The public have a right to know that their money is not being wasted or put at risk due to the Conservatives’ cosy connections with lending firms.

“That’s why we’ve called for a full, transparent and thorough investigation into the Greensill affair. The public will expect speedy answers from the Government.”

Rachel Reeves MP, said:

“Yet more rules on lobbying and transparency have been broken and the Conservatives have nothing to say.

“Taxpayers deserve to know the true extent of Government access given to Greensill Capital through the former Conservative Prime Minister.

“The Conservatives cannot keep turning a blind eye to David Cameron’s behaviour and must get a grip of the cronyism at the heart of Government.”

 

Letter from the Shadow Chancellor of the Exchequer Anneliese Dodds MP and the Shadow Chancellor of the Duchy of Lancaster Rachel Reeves MP to Simon Case CVO, the Cabinet Secretary.

Dear Simon,

On 24 March, we wrote to you raising concerns regarding reports of lobbying by former Prime Minister David Cameron on behalf of Greensill Capital, and the process by which it was accredited as a lender under the Coronavirus Large Business Interruption Loans Scheme (CLBILS) before the company collapsed, potentially putting millions of pounds of taxpayer money at risk.

In the days since, several investigative accounts have examined the level of access that Lex Greensill, head of Greensill Capital, was given at the heart of Government.

Yesterday a UK Government business card dating from 2012 naming him as a ‘Senior Advisor’ to the Prime Minister’s Office emerged. This followed reports at the weekend into his subsequent role as a Crown Representative and his work exploring supply chain financing for the Conservative-led Government. A Downing Street spokesman has since confirmed that Lex Greensill acted as a Supply Chain Finance Advisor from 2012 to 2015 and as a Crown Representative for three years from 2013.

Further reports have lifted the lid on the growing use of the supply chain financing championed by Lex Greensill within the public sector, including in recent years.  According to these reports, the Crown Commercial Service, a branch of your office, is advertising an “advance payment solutions” framework that proposes to extend supply chain finance across the public sector. This follows the collapse of a contract worth £30 million to cover an early payment system for NHS pharmacists that was run jointly by Greensill and Taulia, a US software company, since 2018. The new contract will be worth almost three times as much as the previous one.

Today it was reported that Bill Crothers, the former head of UK Government procurement, failed to consult the Advisory Committee on Business Appointments (Acoba) watchdog before becoming a director of Greensill Capital in August 2016 – just eight months after leaving Government. Crothers was in this post when Greensill was awarded the contact to run the pharmacy payments scheme. Government records also show that officials from your office, including your predecessor and the Permanent Secretary to the Cabinet Office, met with representatives from Greensill Capital 13 times between June 2016 and September 2020.

These latest reports raise new and urgent questions about the level of access to the Conservative Government that was afforded to Lex Greensill and Greensill Capital through the former Prime Minister, the potentially dangerous systemic risk to the public service of the growing use of shadow banking within Government, the degree to which public money has been put at risk or wasted as a result, and the extent to which potential breaches in lobbying and transparency rules are being taking seriously within Government.

Several of these questions relate to the actions of your department in recent years. We would therefore be grateful if you could address the following questions:

  • Can you urgently confirm whether you plan to launch a full, transparent and thorough investigation into both the accreditation of Greensill as a CLBILS lender and the role Mr Cameron played ahead of that decision?
  • Does the Government consider itself to be subject to its own Prompt Payment Code? If so, can you explain why the Government is entering into supply chain financing schemes in the first place?
  • How much has Greensill Capital earned from the supply chain financing scheme for NHS pharmacists it was awarded by the Government, which opened over a billion pounds a year in NHS pharmacy invoices to the lending firm, both from the contract and via interest charges?
  • Why, after the failure of one supply chain finance contract with Greensill Capital, did your office put out to tender a much larger and more wide-ranging supply chain finance contract?
  • Can you confirm if this contract was open to competitive tender to all payments firms?
  • Has the contract been suspended, and if so, when was this decision taken and by whom?
  • Do you agree that supply chain financing schemes come at an additional cost to the public purse that could be averted by ensuring Government pays suppliers in good time?
  • The Government’s response to the 2012 Breedon Review said it would consider the role of supply chain finance as a means to reduce the working capital costs for the SMEs in its supply chains. Other than the Pharmacy Earlier Payment Scheme, has the Government contracted for any other supply chain financing schemes relating to payment of its own suppliers since 2012?
  • What was the scope of work which Lex Greensill was given as a Crown Representative and can the written details of this be published in the public interest?
  • What is the current scope of work given to Crown Representatives, and how are additional lobbying activities for outside interests monitored to prevent conflicts of interest?
  • Why was Lex Greensill’s six-month role exploring supply chain financing for the Government not announced internally or publicly?
  • What measures are in place to ensure that there is full transparency from Government to prevent this from happening again?
  • Prior to the Lobbying Act being passed through Parliament, Labour tabled amendments to the Bill extending coverage of it to in-house lobbying, which were opposed by the Conservatives. These would have covered the activity by the former Prime Minister. Will the Government now reconsider the importance of transparency and lobbying accountability – particularly through the form of an Integrity and Ethics Commission as Labour is proposing – to address this gap?

The irresponsible behaviour of Greensill Capital and its almost unparalleled access to the heart of Government raises serious questions about what kind of businesses the Government is engaging with. The advantages and access bestowed on Greensill Capital were not enjoyed by many responsible British businesses that have been placed under huge strain during the pandemic, including those forgotten and excluded from Government support throughout this crisis.

The Government has a duty to maintain strong financial control over public funds used to deliver and supply services. To uphold public confidence in these processes and ensure they deliver value for money for the UK taxpayer, it is imperative that a full, transparent and thorough investigation into this affair is launched immediately.

We look forward to your swift response and reassurances that this investigation is underway.

Yours sincerely

Anneliese Dodds MP               Rachel Reeves MP

Shadow Chancellor                 Shadow Chancellor of the Duchy of Lancaster