David Cameron and Lex Greensill to be quizzed by MPs

Former Prime Minister David Cameron and Lex Greensill will appear before MPs to account for the failure of finance firm Greensill and its lobbying of government before it imploded.

Mr Cameron was an adviser to the firm, which was founded by Mr Greensill and which supplied to credit to companies such as GFG, the sprawling conglomerate controlled by industrials entrepreneur Sanjeev Gupta.

The former PM sparked a storm when it emerged he sent texts to Chancellor Rishi Sunak’s private mobile phone to ask for government support for Greensill before its collapse.

The Treasury Select Committee last month began an inquiry into the failure of Greensill and its interaction with government departments.

Mel Stride, chairman of the committee, said: “We are determined to answer the key question as to whether HM Treasury responded appropriately to the lobbying on behalf of Greensill Capital, including that carried out by David Cameron.

“We also want to establish what lessons there are from Greensill’s collapse for the operation of the financial system.”

Greensill Capital went into administration in early March after major investors including Credit Suisse pulled support because of concerns about its concentration of lending to GFG using controversial supply chain financing.

Documents issued by the Treasury show that Mr Sunak told the former Prime Minister that the requests for access to the Covid Corporate Finance Facility (CCFF) loans were being examined.

According to the Treasury, Mr Cameron texted the Chancellor as an employee of Greensill Capital, “with an expectation of confidence”.

It added that Mr Cameron also contacted Jesse Norman, financial secretary to the Treasury, and John Glen, economic secretary to the Treasury, on Greensill's behalf.

The former Prime Minister - who gave Mr Greensill a position as an unpaid adviser in No 10 during his tenure at Downing Street - also contacted the Bank of England to seek help after failing to make any progress with the Treasury.

Mr Cameron made several requests to Deputy Governor Sir Jon Cunliffe starting in March 2020, according to documents released by the central bank.

On April 3 2020 Mr Cameron wrote to Sir Jon: "The request is simple - please include in the CCFF the ability to purchase bonds issued in respect of supply chain finance."

He said this would allow Greensill Capital to “pump billions” into small firms.

When he failed to generate a positive response, Mr Cameron later wrote to Sir Jon calling the situation “incredibly frustrating”.

The appearance of Mr Cameron and Mr Greensill will be the inquiry’s second evidence sessions.

At the first hearing on April 28 former Treasury official Lord Macpherson told the committee that repeated meetings with Greensill Capital wasted valuable time during the coronavirus crisis.

Lord Nick Macpherson added that it was “unusual” for so many meetings with top Treasury mandarins and with one particular business, especially when it was relatively small.

“Once you say the scheme doesn’t work, it’s tedious continuing to have meetings and that displaces important resource,” he told MPs on the committee. “It was disappointing officials’ time was wasted when that was a valuable commodity because of the wider crisis.”

Former City Minister Lord Myners, who said he turned down the offer of a directorship at Greensill Capital, also gave evidence.

He said Treasury officials would not have spent so long meeting Greensill Capital without pressure from Mr Cameron and Mr Sunak.

“The Chancellor said he was pushing officials… I have no doubt that he would not have done that had it not been for the pressing by David Cameron on the Chancellor,” Lord Myners said.

The select committee has also already written to Mr Cameron, the Treasury, the Bank of England, the Financial Conduct Authority and UK Government Investments asking for information relevant to the inquiry.

MPs will decide whether to publish the responses next week.