Cameron in lobbying row over risk to pharmacies from Covid loan company
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David Cameron, the Foreign Secretary, was dragged into a new lobbying row on Friday over claims that Britain’s pharmacies could go bust without a Covid bailout from finance company Greensill Capital.
The threat to pharmacies during the pandemic was investigated by the Treasury, which authorised payments to keep them afloat.
As part of its business model, Greensill paid pharmacies earlier than if they waited for the NHS to reimburse them for prescriptions. Greensill would then collect its money from the NHS, having already taken its cut.
The prospect of pharmacies being shut alarmed ministers at a time when they were needed for the rollout of Covid vaccines. Greensill, which employed Lord Cameron as an adviser, went bust in March 2021 at a time when millions of people needed the jabs.
Rishi Sunak, who was then chancellor, was so alarmed he asked Richard Sharp, an adviser in the Treasury and former Goldman Sachs banker, to investigate.
It is understood Mr Sharp began phoning the major pharmacy chains - about 30 in total - and found only a handful used Greensill’s Pharmacy Early Payment Scheme facility.
Mr Sharp, who was subsequently appointed chairman of the BBC, concluded there was little risk of pharmacies closing without the Greensill loans.
The Treasury authorised the NHS to make payments to ensure the few affected stayed afloat.
In the year before Greensill went bust, Lord Cameron had run an intensive lobbying campaign to try to ensure the financing company was given access to Covid loans.
The re-igniting of the lobbying row casts a spotlight on Lord Cameron following his return to government as Foreign Secretary.
It is reported Lord Cameron was paid as much as £7 million over three years working as an adviser to Greensill.
In one text message to Sir Tom Scholar, the former permanent secretary to the Treasury, Lord Cameron highlighted Greensill’s role in paying pharmacies early.
In the message, sent on April 2 2020, during the early days of the pandemic, Lord Cameron wrote as part of a lobbying campaign to secure access to cheap Government loans for Greensill:
The Treasury refused Greensill’s application for cheap loans under its Covid Corporate Financing facility.
In a message to Sir Charles Roxburgh, the then second permanent secretary to the Treasury, an official whose name has been redacted in emails released as part of a parliamentary investigation, wrote on March 21 2020 of his scepticism over the need for Government to extend loan facilities to Greensill.
The official questioned why Lex Greensill, the founder of Greensill, had not been able to “agree to share a list of the largest investors” whose cash flow had dried up during Covid. “I may be being unduly sceptical,” wrote the official, adding: “It would be very useful to know what the Bank’s instincts are.” The official also requested information “on their importance to the NHS (in particular advances to pharmacies) that would be helpful”.
A subsequent parliamentary inquiry found that “only 14 per cent of pharmacies participated in the scheme, far fewer than the Department’s [Department of Health] anticipated participation rates of 60-80 per cent”.
‘Neither scheme delivered what it promised’
The report by the Public Accounts Committee said that both the Department of Health and Social Care and the NHS “took up schemes Lex Greensill advised the government on and promoted through his company - Greensill Capital - from 2018 until the company’s collapse in March 2021”.
But the report concluded: “Neither scheme delivered what it promised and there was no clear rationale for why they were introduced.”
It went on: “The Pharmacy Earlier Payment Scheme was introduced to accelerate reimbursement through use of a private financing arrangement. Lex Greensill advised government that this would deliver savings of £100 million per year. But the Department of Health and Social Care (the Department) cannot provide evidence of any realised benefits.”
Other inquiries into the collapse of Greensill and Lord Cameron’s lobbying on its behalf found the former prime minister had bombarded ministers and officials with 68 messages - including 19 calls, texts and emails in one day - in his bid to increase access to Covid loans for the firm.
In various messages he said he was “genuinely baffled” by the Treasury’s refusal, and described the decision as “bonkers”, “nuts” and likely to be based on a “simple misunderstanding that I can explain”.
In a subsequent statement, Lord Cameron said by making representations to Government on behalf of Greensill, he “was breaking no codes of conduct and no Government rules”.
He stressed his proposals “were not taken up” by the Government, but sought to clarify the use of messages and email, as a means of communication.
“I understand that concern, but context is important: at that time the Government was - quite rightly - making rapid decisions about the best way to support the real economy and welcomed real time information and dialogue,” he said.
