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Treasury Committee reports on ‘Lessons from Greensill Capital’

20 July 2021

The Treasury Committee has today published its unanimously agreed Report on Lessons from Greensill Capital.

In the Report, the Committee considers lessons for the Treasury as well as for the regulation of the financial system, following the failure of Greensill Capital.

Chair's comment

Commenting on the Report, Rt Hon. Mel Stride MP, Chair of the Treasury Committee, said:

“Our report sets out important lessons for the Treasury and our financial system resulting from both Greensill Capital’s collapse and David Cameron’s lobbying.

“The Treasury should have encouraged David Cameron into more formal lines of communication as soon as it had identified his personal financial incentives. However, the Treasury took the right decision to reject the objectives of his lobbying, and the Committee found that Treasury Ministers and officials behaved with complete and absolute integrity.

“There are a number of lessons for the operation of our financial system, including the need for urgent reform of the Change in Control regulations for the acquisition of banks, reform of the appointed representatives regime, and the need for more data on non-bank lending.”

“We look forward to the conclusions of the other inquiries on the collapse of Greensill Capital, and will continue to follow developments closely.”

Summary of conclusions and recommendations

Lessons for the financial system

  • Greensill Capital's stated business was the provision of supply chain finance. This is a form of short-term finance where future payment obligations are transferred to a finance provider in return for that provider paying the supplier up front.
  • The Committee does not believe that the failure of Greensill Capital has demonstrated a need to bring supply chain finance within the regulatory perimeter for financial services.
  • While supply chain finance appears to be useful in some contexts, the Committee believes it would be preferable for the Government to address the underlying cause of the problem by paying suppliers sooner.
  • Greensill Capital was not regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA), and where Greensill needed to undertake regulated activities, the firm made use of the ‘appointed representatives’ regime. The Committee concludes that firms may be using the appointed representatives regime for purposes well beyond those for which it was originally designed. It recommends that the FCA and Treasury consider reforms to the regime, with a view to limiting its scope and reducing opportunities for abuse.
  • Wyelands Bank was a regulated bank which was owned – and wound down – by Sanjeev Gupta. The Committee recommends, as a matter of urgency, that there be reform of the Change in Control process which regulates who can acquire ownership of an existing bank. This should ensure that the PRA has powers to ensure that existing banks do not fall into the hands of owners who would not be granted a banking licence in their own right.
  • The Committee notes that once it had been approved as a lender under the Coronavirus Large Business Interruption Loan Scheme (CLBILS), there was a risk that Greensill would funnel money towards the GFG Alliance. While the Bank of England shared information concerning the GFG Alliance with the Treasury, who subsequently passed it on to BEIS, information about the Alliance and Wyelands Bank was not passed to the British Business Bank. The Committee believes there remains an open question as to whether the Treasury, BEIS and the British Business Bank missed an opportunity to prevent these guarantees being extended.


  • Former Prime Minister David Cameron was acting as a representative of Greensill with a very significant economic interest in the firm. The Committee concludes that, once his position had been identified, his status as ex-Prime Minister should have been irrelevant to the Treasury's treatment of his approaches.
  • The Committee concludes that Mr Cameron's use of less formal means to lobby Government showed a significant lack of judgement on his part, especially as his ability to use an informal approach was aided by his previous position of Prime Minister.
  • It is also noted that there were obvious personal links between Mr Cameron and those he lobbied in Government. The Committee believes that the Treasury should have encouraged Mr Cameron into more formal methods of communication at the initial stage of his lobbying, that there should have been a discussion as to whether Mr Cameron's ongoing contact posed any reputational risks, and whether mitigation was required.
  • In the light of these events, the Committee expects the Treasury to put in place and publish formal processes to deal with lobbying attempts by ex-Prime Ministers or Ministers in the future.
  • The Committee notes that while Mr Cameron did not break the rules governing lobbying by former Ministers, they are of insufficient strength and there is a good case for strengthening them.
  • The Committee questions Mr Cameron's judgement about the financial health of Greensill, and concludes that Mr Cameron should have taken a broader and more enquiring assessment of the business, rather than relying on the company’s Board as a guarantee of its propriety and financial health. There were signals available to Mr Cameron that might have led him to a more restrained approach.

Lessons for the Treasury

  • The central argument of Greensill's attempt to gain access to the Covid Corporate Financing Facility (CCFF) was that it would substantially benefit a very significant number of UK SMEs. Neither the Treasury nor the Bank of England believed there was merit in this claim. The Committee believes this was more of a sales pitch than a reality.
  • The Committee accepts that, given the considerable need to provide support to businesses at the start of the pandemic, it was right for the Treasury to seriously consider the proposals presented by Greensill.
  • The Committee acknowledges that Treasury officials and Ministers behaved with complete and absolute integrity in their handling of Mr Cameron's lobbying, and took the right decision in preventing Greensill from accessing the CCFF.
  • However, the Committee are very surprised by the Treasury’s claim that Mr Cameron’s former position had no meaningful effect on how Greensill's application for access to the CCFF was dealt with. Mr Cameron was an ex-Prime Minister, who had worked with those he was lobbying and had access to their mobile phone numbers. The Committee believes that the Treasury's unwillingness to accept that it could have made any better choices in how it engaged in this case is a missed opportunity for reflection.
  • Greensill also operated Earnd, a salary advance service provided to NHS Trusts. The Committee recommends that the Treasury be more involved in determining whether such 'novel' schemes, when provided for free, are appropriate in the provision of public services, and whether they provide benefits for Government. If they are deemed appropriate, the Government should consider whether additional controls are required.
  • While the nature of the next civil emergency is unknown, the Committee recommends the Treasury consider what information is needed to plan for potential future emergencies. It should ensure that major emergency planning exercises involve the consideration of the potential economic impacts.
  • In response to a Freedom of Information request, the Treasury said its IT desk reset 117 of its approximately 2,100 mobile phones in 2020, including that of the Permanent Secretary. The Committee are concerned that Government records, held on the phone of the Permanent Secretary, are subject to deletion based on lapses of his memory.
  • While the Permanent Secretary acted correctly in transferring messages of any substance to the official record, the Committee recommends that the Government reviews its policies to prevent the complete deletion of Government records by the misremembering of a mobile phone password. The wiping of information under these kinds of circumstances could have the unfortunate consequence of leading some to the suspect it to be deliberate. To be very clear, the Committee does not believe this to be the case in respect of the Permanent Secretary.

Cost to public funds

  • While the Treasury appears confident that the direct costs of Greensill's failure to the public purse will be limited, the indirect costs will relate to the guarantees provided under the CLBILS scheme, which are currently suspended. The Committee believes it is too early to assess what additional costs to the public purse might crystallise.


  • The Committee believes that those approaching Government for support from public finances for policies in their personal or corporate favour should expect public scrutiny and transparency. Any other approach runs the risk of appearing to be in conflict with good governance.

Further information

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