UK finance minister under attack over Greensill row

British finance minister Rishi Sunak stood accused on Friday of breaking ministerial rules by exploring state help for now-bankrupt finance company Greensill at the request of former prime minister David Cameron, prior to its collapse.

Sunak “pushed” officials to explore help for the stricken firm in April 2020 after Greensill adviser and fellow Conservative Cameron “reached out informally by telephone” to him, the Treasury revealed onThursday in new documents.

The now-bankrupt Greensill had approached Treasury officials to gain access to the government’s emergency COVID Corporate Finance Facility (CCCF).

Greensill specialised in short-term corporate loans via a complex and opaque business model that ultimately sparked its declaration of insolvency last month -- almost a year after the messages between Cameron and Sunak.

Sunak’s exchanges with Cameron were revealed following a official request from lawmaker Anneliese Dodds, finance spokeswoman for the main opposition Labour party.

“These messages raise very serious questions about whether the Chancellor may have broken the ministerial code,” Dodds said.

“They suggest that Greensill Capital got accelerated treatment and access to officials, and that the Chancellor ‘pushed’ officials to consider Greensill’s requests.

“The Chancellor’s decision to open the door to Greensill Capital has put public money at risk.

“There must be a full, transparent and thorough investigation into the chain of events that saw Greensill awarded lucrative contracts, the freedom of Whitehall and the right to lend millions of pounds of Government-backed Covid loans.”

Labour has called on Conservative Prime Minister Boris Johnson’s administration to tighten the law on lobbying amid ongoing controversy over Cameron’s Greensill links.

Sunak meanwhile stressed on Thursday that Cameron’s request was declined.

“I can confirm that David Cameron reached out informally by telephone to me, and to the Economic Secretary and the Financial Secretary, on the matter of Greensill Capital’s access to the CCFF,” Sunak wrote in a letter to Dodds.

“The matter was referred to the relevant officials and, following appropriate consultations as outlined in the previous requests, the request was turned down.

“During this process, this was communicated to Greensill Capital by officials and, in parallel, by me to David Cameron.”

Ex-Conservative Party leader Cameron, who led Britain from 2010 to 2016, was exonerated by Britain’s lobbying watchdog last month over his Greensill links.

The Registrar of Consultant Lobbyists investigated the matter and concluded that Cameron was a Greensill employee and was therefore not required to declare himself on the register of consultant lobbyists.

Sterling stabilises: Sterling steadied on Friday, having touched a two-month low against the dollar in early London trading, and was set for its biggest weekly drop against the euro so far this year, hurt by profit-taking after a strong first quarter.

The pound had its best quarter against the euro since 2015 in the first three months of 2021, boosted by the UK’s vaccine rollout, which is one of the fastest in the world, as well as a fading of negative interest rate expectations.

Analysts also attributed its strengthening against the euro to an expectation that economic recovery in the UK would outpace that in the euro zone.

But that trend reversed this week, with sterling falling against the euro on Tuesday, Wednesday and Thursday - a move which market participants said was amplified by a squeeze of euro-pound short positions.

At 1207 GMT, the pound was at 86.615 pence per euro, up around 0.2% on the day. It remained on track for its biggest weekly fall since September 2020, down 1.9%..

Versus the dollar, the pound was down 0.1% at $1.3723, and also on track for a weekly loss.

Britain has surged ahead of the rest of Europe in the race to vaccinate its population, with almost half of its citizens receiving a first dose.

But supply issues from surrounding its main Oxford-AstraZeneca shot have slowed progress in recent days, while Germany’s inoculation campaign has sped up.

“The selling of sterling may have been connected to buying of euros,” Marshall Gittler, head of investment research at BDSwiss, wrote in a note to clients.

“It looks like perhaps people are getting more optimistic about the rollout of a vaccine in the EU and less optimistic about the comparable move in the UK.”