Newly-released documents have revealed how Lex Greensill warned the Treasury that tens of thousands of British small businesses could miss out on payments if he and David Cameron failed in their efforts to secure Covid support from the government.
Fresh disclosures revealed how Cameron and the Australian financier made a barrage of increasingly desperate appeals to Treasury officials and the Bank of England for support for the ailing Greensill Capital as sources of income dried up in the early weeks of the Covid-19 pandemic.
For the first time, former cabinet secretary Mark Sedwill was drawn into the scandal, as Mr Greensill credited him with putting him in touch with the Treasury’s number two mandarin Charles Roxburgh who was leading the establishment of a Covid Corporate Finance Facility (CCFF) to help large firms.
The 30-page dossier was released by the Treasury on Thursday evening after a day in which Mr Roxburgh and the Treasury’s top civil servant Sir Tom Scholar gave evidence to a parliamentary inquiry of “persistent” lobbying from Cameron and Greensill.
It revealed that their approaches were greeted with some scepticism, with one Treasury official noting that, while saying in a phone call that support for his company could help bail out UK firms, Mr Greensill was unable to confirm that his suppliers were anything more than “substantially” in the UK.
The chair of the House of Commons Public Accounts Committee, Meg Hillier, warned of “the danger of government by WhatsApp” as details emerged of Cameron and Greensill sending multiple messages to the mobile phones of ministers and officials.
The Treasury’s top civil servant confirmed that he took a call from Cameron on his mobile because he had previously worked for him during his time as prime minister, telling a parliamentary inquiry that it was “quite natural” for Whitehall officials to accept approaches from ex-ministers and private sector individuals who they knew.
Meanwhile, Mr Johnson launched an internal Cabinet Office inquiry into the leak of his text message exchanges with businessman James Dyson, in which he offered to help “fix” the vacuum cleaner tycoon’s tax problems.
The move represented a U-turn less than 24 hours after Downing Street indicated there would be no probe. But the inquiry will not cover the leak of messages from Saudi Crown Prince Mohammed bin Salman asking the PM to intervene in a planned takeover of Newcastle United, and its report will not be made public.
The prime minister’s official spokesman did not deny reports that cabinet secretary Simon Case urged Mr Johnson to change the mobile phone number which he has had for over a decade because of concerns at the number of contacts he was receiving from people outside government, though a senior Whitehall source insisted the claims were not accurate.
Labour called on the government to release details of every call, text and meeting with Mr Cameron.
Leader Sir Keir Starmer said: “Many members of the public - and I think particularly about all those businesses that have struggled over the last 14 months, - would say ‘I would have loved to have had the prime minister’s number to text him to sort out my tax problem to help my company’.
“This is about those that can access the prime minister by texting him and everybody else who’s left out.”
Sir Tom told the Public Accounts Committee that he had received a number of text messages from Mr Cameron in March and April last year and spoke to him by phone on 7 April, while Mr Roxburgh confirmed that he held nine conference-call meetings with Greensill.
Challenged by committee chair Meg Hillier over whether other lobbyists would have found it as easy as Mr Cameron to get through to him, Sir Tom told MPs: “If a former minister that I have worked with asks to talk to me, I will always do that… I think it’s natural when somebody that you know asks to speak to you, it’s quite natural to take that call.”
Scholar and Roxburgh confirmed that they were aware that Cameron was also making direct approaches to chancellor Rishi Sunak and Treasury ministers Jesse Norman and John Glen, but insisted they did not feel “under any pressure” to alter their response to Greensill’s requests.
Treasury documents showed that Mr Greensill warned officials in March that it was becoming “nearly impossible” for his firm to supply credit to small businesses, pharmacies and NHS staff as capital markets were closed to the company.
In a letter to Roxburgh on 20 March, he said Greensill needed “timely support” in order to continue to provide credit, and needed only “three tweaks” to the government’s Covid scheme in order to qualify for support.
Greensill’s continued support to pharmacies alone could inject £1.5bn into the UK economy, he said. And minutes of a phone call on 30 March showed that he had expressed “grave concern” that many tens of thousands of small businesses would miss out on payments the following week if Greensill was not helped.
Text messages from Mr Cameron to the Treasury’s senior civil servant Sir Tom Scholar - referred to by the mandarin as “some incoming from my old boss” - were blacked out in the dossier released today.
The Treasury has previously insisted that it will not release Mr Cameron’s messages, as they were sent with the expectation of privacy.
In a wry aside to Mr Roxburgh as he forwarded the former PM’s texts, Scholar said: “Well done for holding off [REDACTED]. Not often anyone manages that.”
Meanwhile, the Bank of England released a 24-page dossier of emails and letters sent by Greensill, and Mr Cameron as its senior adviser, as the company sought approval for CCFF funds.
They showed that Mr Cameron emailed the Bank’s deputy governor Sir Jon Cunliffe on 5 March 2020, to set up a call on 17 March at which he and company founder Lex Greensill spoke to Bank officials.
Minutes of the call reveal that Greensill “explained that they were coming under significant pressure in current market conditions” and called for a re-establishment of a scheme used in the 2009 financial crisis to “protect the supply of working capital to the real economy”.
After the company was turned down for CCFF help, Mr Cameron contacted Cunliffe on 3 April.
Signing himself “Dc”, the former prime minister said the Treasury seemed “hung up” on the fact that the CCFF was designed for non-financial corporates, insisting that this was “irrelevant” as Greenshill wanted to pass on loans to small and medium-sized enterprises (SMEs)
“At a time when we are - rightly - worried about how quickly banks can get loans out to small businesses, why are we potentially cutting off a market that already pumps cheap credit directly into SMEs?” he asked the deputy governor on 3 April.
“I think I must be missing something here. Am obviously talking to HMT, but would be grateful for any light you could shed on this.”
On 22 April, he told Cunliffe he still had not got the green light from the Treasury, describing the situation as “incredibly frustrating”.
Greensill’s attempts to secure state Covid support ultimately came to nothing and the company has since gone into administration.