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22 April 2021

Cameron’s repeated attempts to lobby Bank of England for Greensill revealed

22 April 2021

David Cameron repeatedly lobbied Bank of England officials as he grew increasingly frustrated about Greensill Capital’s failure to access a state-backed coronavirus support scheme.

The former prime minister, who worked as an adviser for Lex Greensill’s financial firm, also contacted the Treasury as he tried unsuccessfully to get the firm’s activities covered by the Covid Corporate Financing Facility (CCFF).

Mr Cameron wrote several times to the Bank’s deputy governor Sir Jon Cunliffe, who had been the former prime minister’s envoy to the European Union, about the “incredibly frustrating” situation.

Cheltenham Literature Festival (PA Archive)

Correspondence since March 1, 2020 was released under Freedom of Information laws.

Mr Cameron emailed Sir Jon Cunliffe, the Bank’s deputy governor, on March 5 2020, the first in a series of emails and calls disclosed between the former prime minister, Mr Greensill and Threadneedle Street.

On March 17, Mr Greensill and Mr Cameron held a call with Bank officials to explain Greensill Capital’s supply chain finance operation.

The minutes of the call note that Greensill Capital “explained that they were coming under significant pressure in current market conditions” and called for a re-establishment of the secured commercial paper facility scheme used in the 2009 financial crisis to “ease market conditions and protect the supply of working capital to the real economy”.

By April 2020, the correspondence moved on to Greensill’s attempts to access the newly-created CCFF, under which the Bank lent money directly to large companies, backed by the Treasury.

On April 3 2020, Mr Cameron wrote to deputy governor Sir Jon “to ask for your help”, claiming Greensill had numerous conversations with the Treasury but “have failed to get anywhere”.

He said “the request is simple”, asking for the CCFF to cover bonds issued in respect of supply chain finance – the area of business which Greensill specialised in.

Mr Cameron claimed this would allow Greensill to “pump billions” into small firms, including every pharmacy working with the NHS.

As his efforts failed to make progress, Mr Cameron wrote on April 22 2020, telling Sir Jon it was “incredibly frustrating”.

“Even a small participation of SCF in the CCFF would make a big difference in catalysing the market,” he said.

Mr Cameron acknowledged that ultimately the scope of the scheme was a “Treasury call” – adding that “we continue to talk to them at every level” – but he asked Sir Jon to have a “one-to-one call” with Mr Greensill.

A Bank write-up of that call said that most if it was taken up by “Lex explaining their business model”, while Sir Jon was “clear that Greensill would currently fall outside the boundaries of the scheme” and that changes to the parameters were a matter for the Treasury.

At a Commons Public Accounts Committee hearing on Thursday, Treasury permanent secretary Sir Tom Scholar said Rishi Sunak’s department was “persistently” lobbied by Greensill.

Sir Tom told the committee that he believed the Treasury had dealt with the company’s approaches – including from Mr Cameron – in a “completely appropriate way”.

Charles Roxburgh, the second permanent secretary in the department, told MPs the firm’s approaches were rejected because they were outside the scope of the scheme.

“They were proposing that special purpose vehicles could have access to the scheme and that was not consistent with the scheme’s design,” he said.

“They were suggesting that the CCFF should buy commercial paper that had non-standard terms and again that was not consistent with the design.”

Greensill collapsed in March 2021, threatening thousands of UK jobs at Liberty Steel which was dependent on its finance.

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