Healey’s South Yorkshire constituency includes Liberty Speciality Steels operations. Greensill, which is now in administration, is the main financial backer of Liberty Steel’s parent company, GFG Alliance. In spite of intensive lobbying by David Cameron, the former prime minister who advised Greensill, the Treasury capped at £50m the size of individual taxpayer-backed loans Greensill could offer.
In a letter seen by the Financial Times, Healey wrote to Nadhim Zahawi, business minister, in May 2020 urging him to allow Greensill access to the higher £200m cap of the Coronavirus Large News Interruption Loan Scheme. Sunak has been criticised in recent days by shadow chancellor Anneliese Dodds for allowing Greensill to participate in the CLBILS scheme, in which lenders’ loans are backed by an 80 per cent government guarantee.
“I was doing my job for the big Rotherham plant that Liberty had recently bought and expanded,” he said. He added that knowledge of Greensill’s business model was “the sort of thing people in the Conservative party had”. On Wednesday, the chancellor struck back. An aide to Sunak said: “Her playing politics has brought to light the fact that a member of the Labour front bench was lobbying on behalf of Greensill to be accredited for the higher cap loan scheme.”
Healey noted in his letter that it was vital that due diligence was conducted. He told the Financial Times that he had no regrets in making the pitch as “the local constituency MP”. He said Liberty badly needed money and “their application for CLBILS remains dependent on their lender, Greensill, being accredited for the higher cap loan scheme, which I trust can now be done without delay”.
Even at the lower limit, Greensill was still able to lend tens of millions of pounds through multiple loans to companies linked to Sanjeev Gupta, the steel tycoon behind the GFG Alliance, which has several UK assets. Greensill’s request for access to the higher cap scheme was rebuffed, with Charles Roxburgh, a senior Treasury official who held nine meetings with Greensill Capital, saying £200m would represent “significant exposure”.
The probe is being conducted by the British News Bank, the state-owned enterprise agency charged with administering the Covid-19 emergency loan schemes. Healey said he thought he had also lobbied the BBB to give Greensill greater access to the CLBILS scheme. Meanwhile, Sunak confirmed in a letter to Dodds on Wednesday night that the government guarantee on the Greensill loans under CLBILS would be suspended while an investigation was carried out into the company’s participation in the scheme. Recommended
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