Labour summons Chancellor to Parliament to explain his role in Greensill scandal
Chancellor Rishi Sunak will be hauled before Parliament tomorrow to explain why he granted Greensill Capital access to a Covid loan scheme for businesses, putting hundreds of millions of pounds of public money at risk.
The Speaker has granted an Urgent Question tabled by Labour’s Shadow Chancellor Anneliese Dodds asking 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.
The Chancellor is also under pressure after text messages he sent to former Conservative Prime Minister David Cameron revealed he “pushed” his officials to explore how to help Greensill Capital access the Covid Corporate Financing Facility (CCFF), a separate Covid loan scheme. The texts also suggest the Chancellor responded directly to Mr Cameron’s overtures and spoke with him over the phone. Labour has warned that the Chancellor’s actions could constitute several breaches of the ministerial code.
Labour will demands answers on:
- The lack of transparency over the Chancellor’s conversations with David Cameron about Greensill’s application to Covid loan schemes.
- The “alternative” he “pushed the team to explore” in his text message of 23 April 2020.
- The discussions he held with the British Business Bank about whether Greensill Capital should get access to the CLBILS after it was rejected for the Covid Corporate Financing Facility (CCFF).
- The accreditation criteria for the CLBILS scheme, and if they were changed to allow Greensill Capital to access it.
- The fact that Greensill Capital was the only supply chain firm accredited to the CLBILS scheme after it got so much access to the Treasury.
- The Government’s plans to enter into further supply chain financing schemes with Greensill Capital.
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.
Sunak has been absent from Parliament since the Greensill scandal unfolded, having not appeared in the House since 9 March.
Anneliese Dodds, Labour’s Shadow Chancellor, 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.”