Greensill Capital

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on the process by which Greensill Capital was approved as a lender for the coronavirus large business interruption loan scheme.

Greensill Capital (UK) Ltd was approved by the British Business Bank for the coronavirus business interruption loan scheme and the coronavirus large business interruption loan scheme last year in accordance with the bank’s published guidance on accreditation. All decisions taken by the bank were made independently and in accordance with the bank’s usual procedure.

The criteria by which the decisions were made were based on those used in the existing enterprise finance guarantee scheme, dating back from 2009, and were set out in the CLBILS request for proposals, which was a publicly available document. These criteria included minimum requirements such as the ability to demonstrate a track record of lending to larger enterprises, provision of evidence-based forecasts, the ability to demonstrate sufficient capital available to meet the lending forecasts, a viable business model, robust operations and systems, that the proposed lending will not have unreasonable lender-levied fees and interest, and that the lender has all the necessary regulations, licences, authorisations and permissions to operate the scheme. All accredited lenders are subject to regular audit by the bank to ensure their compliance with scheme rules.

Following analysis of loan data as part of its standard due diligence, the bank opened an investigation into Greensill Capital’s compliance with the terms of the scheme in October 2020 and informed the Government of this on 9 October. That investigation is continuing and the Government’s obligations as guarantor under the CLBILS guarantee are suspended on a precautionary basis. It would not be appropriate to comment further on the investigation at this time.

I start by paying tribute to the Duke of Edinburgh, who was an extraordinary public servant. My thoughts today are with the Queen and the rest of the royal family as we all mourn his passing. They are also with the friends and family of Cheryl Gillan, and I would like to associate myself with the very moving tributes that we quite rightly heard a few moments ago.

I welcome the Minister’s presence, but it was the Chancellor who needed to come to the House today; the Chancellor who told David Cameron that he would “push” his team to amend emergency loan schemes to suit Cameron’s new employer; the Chancellor whose officials met with Greensill 10 times; the Chancellor who took the credit for Government business loan schemes when they were in the headlines and, indeed, who personally announced those schemes. Yet the Chancellor is frit to put his name to those loan schemes today. He has just spent £600,000 on communications. I would have thought that that would extend to communicating with Parliament. In the Chancellor’s absence, let me ask: what was the alternative that the Chancellor pushed his team to explore after David Cameron texted him? What discussions did the Government have with the British Business Bank about Greensill’s access to CLBILS after it had already been rejected for the covid corporate financing facility? Were the criteria for CLBILS amended so that Greensill could access the scheme? Why was Greensill the only supply chain finance firm accredited for CLBILS, and what due diligence was done?

Hundreds of millions of pounds of public money were put at risk by giving Greensill access to this scheme. With Greensill’s collapse, thousands of jobs—in Rotherham, Hartlepool and right across the country—have been put at risk. Those workers and taxpayers across the country deserve answers. The Chancellor said that he would “level with” the public. Why is he running scared of levelling with them on the Greensill scandal?

I associate myself with the hon. Member’s words about the Duke of Edinburgh and, of course, our colleague Cheryl Gillan, both of whom will be sorely missed.

The Chancellor wrote to the hon. Member last week with a comprehensive response to her questions regarding engagement between Greensill and HM Treasury. The Prime Minister has asked Nigel Boardman to conduct a review to look into the decisions taken around the development and use of supply chain finance and the associated schemes in Government—especially the role of Lex Greensill and Greensill Capital—and to set out any findings as necessary. The Government recognise the interest in the matter. It is right that we now let that review happen.

In the interests of transparency, the Chancellor has provided all the messages that were sent from him to David Cameron on this matter; they relate exclusively to Greensill’s proposals for the covid corporate financing facility. The Chancellor is right to push officials, as we all have, to explore all ways of capital getting to businesses—large and small. That is what all Members of this House were asking and demanding the Government to do at that particular point. It is important to remember that the Chancellor rejected the idea that he should rewrite the CCFF to include any banks.

The reason the Chancellor is not here is that the question is about the CLBILS. I suggest to the hon. Lady that she asks her question in a different forum or that she asks a different question, because the coronavirus large business interruption loan scheme, to which this question pertains, is administered by the British Business Bank. The Secretary of State for Business, Energy and Industrial Strategy is the sole shareholder in the bank. As such, the responsibility for the delivery of the scheme sits with BEIS. The accreditation process for any of the covid loan schemes is run independently by the British Business Bank; neither BEIS nor HM Treasury had a role or were involved in the CLBILS accreditation decision for Greensill.

Will my hon. Friend confirm that in all dealings with Greensill, the Department for Business, Energy and Industrial Strategy, the Chancellor, his Ministers and his officials always followed all appropriate codes of conduct?

Indeed; all the decisions were taken independently, and that included rejecting Greensill from being able to access the higher level of loan facility, the only request for which came from the shadow Secretary of State for Defence, the right hon. Member for Wentworth and Dearne (John Healey).

I express my condolences, on behalf of the Scottish National party, to the family and friends of Cheryl Gillan and Shirley Williams. I also wish my constituents, and everyone celebrating, Ramadan Mubarak and a happy and peaceful Vaisakhi.

This scandal further exposes the depth of cronyism at the heart of this UK Tory Government—and it is not new, because back in November the National Audit Office expressed concerns about a VIP list of suppliers, with those on the list 10 times more likely to get a contract than those who were not. The Financial Times reports today that £19 billion of covid contracts were awarded without rival bids.

There remain serious questions about the role of Greensill while Mr Cameron was Prime Minister and about who exactly is being afforded similar influence in the UK Government today. It is absolutely galling that some have hoovered up so much Government support while millions who do not happen to have ministerial phone numbers get absolutely nothing at all.

Will the Prime Minister, the Chancellor and Secretary of State for Health and Social Care come before the House to explain their actions? How can we have confidence in the inquiry that has been announced when, from the Home Secretary’s bullying to the race equality report, this UK Government have such a woeful record on marking their own homework?

A number of the issues the hon. Lady raised were slightly wide of the mark in respect of this urgent question. The review will do its work and Nigel Boardman has had assurance from all parties that they will co-operate and offer any information required. He is due to report back at the end of June.

The furlough scheme, the self-employment income support scheme and the coronavirus business interruption loan scheme have been lifelines for many thousands of my constituents in Redcar and Cleveland, and across Teesside almost 500 businesses have benefited from CBILs worth well over £100 million. Will the Minister confirm that all those businesses have gone through the appropriate checks to be approved and that HMRC will take action against any fraudulent abuse of the scheme?

My hon. Friend is absolutely right: any business applying for any of the Government schemes—I have talked about the accreditation required to deliver those schemes—has to go through a robust procedure. HMRC and other organisations will indeed make sure that we are hot on fraud, because this is taxpayers’ money that we are talking about. That is why, in the instance that this question is about, it is important to remember that the Chancellor rejected the suggestion that was put forward. The process is doing its job.

When an urgent question of a similar nature came before the House just before the recess, I asked the Secretary of State for Business, Energy and Industrial Strategy whether a list of all the organisations that have received loans—whether they were under the bounce back loan scheme, CBILS or any of the other schemes—would be made available, because the Minister has said previously that that will be done “in due course”. When I asked the Secretary of State on that occasion, he said to me that he will “try to see” what can be done to put that list of businesses in the public domain. I hope the Minister agrees that many of these questions are arising because of a lack of transparency in the way that some of the support has been awarded. Will he tell me how the Secretary of State is getting on with publishing that list?

As the hon. Lady will know, at the time of delivery we were trying to deliver money to businesses as quickly as possible. The fact that businesses have accessed support—especially the larger loans under CLBILS—will appear in their accounts, and will obviously be reported to the European Union should that be required for state aid purposes.

I remind the Minister that one of David Cameron’s last big acts as Prime Minister was to hold a large anti-corruption summit in London, with some hard-hitting findings. Will the Government recommit to delivering on all the promises made in the subsequent anti-corruption strategy? Will the Minister confirm that if any changes need to be made as a result of the inquiry that is just starting, they will be brought to Parliament as soon as they possibly can be?

I admire my hon. Friend’s work on anti-corruption. It is important to keep raising the issue, but it is also important to keep a sense of perspective and to tackle actual corruption rather than speculate on other issues for political purposes. As I say, it is important to remember that in these circumstances the process has worked well: it was right to push for as much capital as possible to flow to small and large businesses, but it is important to remember that the Chancellor did reject the suggestion put forward by Greensill.

I would like to wish all celebrating the Hindu new year a happy Navratri and the Sikh community a happy Vaisakhi today.

The Bank of England is rightly independent of the Government. Can the Minister confirm whether or not Bank of England officials were requested by the Treasury to make amendments to its covid corporate financing facility to suit Greensill Capital after the former Prime Minister had texted the Chancellor?

As I have said, the Chancellor rejected any notion that the CCFF scheme should be rewritten.

If we can put to one side the blatant political opportunism here, there is a scandal behind this. Greensill failed because it overextended itself to GFG Alliance. That was signed off by Grant Thornton, GFG’s auditors, effectively on a business model that included borrowing hundreds of millions of pounds based on the security of a very insecure, possibly non-existent order book. Will my hon. Friend bring forward his intended reforms to the audit regulatory system and make sure that Grant Thornton’s role in this is properly investigated?