Former Treasury perm sec says Greensill got ‘unusual’ level of access

MPs told BEIS non-executive director is “wrong man” to probe government’s involvement with collapsed financial firm
Photo: REUTERS/Fabian Bimmer/Alamy Stock Photo

By Jim Dunton

29 Apr 2021

Former Treasury perm sec Lord Nick Macpherson has told MPs probing the Greensill lobbying scandal of his surprise at the amount of departmental time the financial firm was allowed to take up with its unsuccessful attempts to join emergency-funding schemes.

Macpherson, who ran the Treasury from 2005 to 2016, told members of the Treasury Select Committee that he had long been troubled by the access business was given to government. He also said there should be a ban on civil servants having second jobs in commerce.

In the case of Greensill Capital, which employed former prime minister David Cameron to lobby on its behalf and ex-chief commercial officer Bill Crothers as a director, Macpherson said the firm’s contact with the Treasury appeared to have been more about its own survival than anything else.

Last week, current Treasury perm sec Sir Tom Scholar and second perm sec Charles Roxburgh detailed the multiple meetings Greensill had with the department as it tabled numerous proposals to gain admittance to the Covid Corporate Financing Facility support scheme, ultimately without success.

Macpherson told yesterday’s treasury committee hearing he was “a little surprised, quite frankly” by the level of contact Greensill secured with ministers and officials, much of which was driven by Cameron.

“It’s very unusual to have so much engagement with a company the size of Greensill,” he said.  

Macpherson told MPs that while Greensill had positioned itself as having the potential to offer small and medium-sized businesses a liquidity lifeline in the early months of the coronavirus pandemic, he feared the reality was different.

“When businesses come and ask for access to subsidies, which in effect this was, you have to ask yourself very clearly what’s in it for them and what’s in it for the wider economy. Those are the sorts of judgments you have to make,” Macpherson told MPs. 

“I just worry in this case that this was more about Greensill’s survival than about the survival of the SME sector.”

Macpherson added: “I’m in no doubt that business generally has more access to government than ordinary people up and down the country or trade unions or wider civil society, and I think this is difficult. 

“It always slightly troubled me, the ease with which business does get access. Which comes back to the same point: it’s why you have to be very careful.”

Macpherson also said officials pay an important role in helping ministers – right up to the highest level – to make the correct decisions.

“Part of the job of the civil service is to protect ministers from just doing silly things on the spur of the moment,” he said. 

“I know it’s annoying and no doubt some people think it’s obstructive and ‘Sir Humphrey nurse’ and all that. But actually, one or two times,  I can remember chancellors after the event saying ‘I’m really grateful you made that point, because otherwise I might have messed up’.”

Ban on second jobs

Following the revelation earlier this month that former chief commercial officer Bill Crothers worked for Greensill for several months while he was still a civil servant, Macpherson was asked whether he believed there should be a ban on officials having second jobs in the private sector.

“I think that is one of the lessons,” he replied. “You need absolute clarity. Sometimes doing a voluntary job can give you wider experience and insight. Sometimes it's sensible for civil servants to go on secondment to private-sector firms.

“But there needs to be clarity about confilcts, about the cooling-off period, about how these things will be managed. And that is central to the role of permanent secretaries.”

The Crothers revelation prompted an urgent audit of second jobs held by senior civil servants. Cabinet secretary Simon Case said earlier this week he believed that fewer than 100 senior officials have second jobs.

'Many elements of a Ponzi scheme'

Fellow crossbench peer Lord Paul Myners, a business leader drafted into government as financial services secretary to the Treasury during the 2008-2009 financial crisis, was more forthright in his criticism of Greensill than Macpherson.

Myners told MPs he had turned down the offer of a directorship at Greensill Capital after a meeting that left him feeling that the firm’s business model had “many of the elements of a Ponzi scheme”.

Myners said he believed Treasury officials and ministers would not have spent the level of time they did looking into proposals tabled by Greensill without Cameron's lobbying and its impact on chancellor Rishi Sunak. Earlier this month, the Treasury published details of Sunak's text-message contacts with the former PM on the issue.

In particular, Myners said looking into Greensill’s proposals had been an “extraordinary waste” of second perm sec Charles Roxburgh’s time. Last week, Roxburgh told members of the Public Accounts Committee he had nine meetings with Greensill between March and June last year. He said talking to companies was an importatnt part of his job.

Myners said Cameron had been a “salesman” for the firm and ought to have been aware of the financial difficulty it was in.

“I believe he should have known and he should have asked questions which would have indicated that,” he said.

BEIS non-exec Boardman ‘wrong pick’ to lead official probe

Myners also told MPs he believed there was a fundamental problem with prime minister Boris Johnson’s choice of Nigel Boardman, a lawyer, to lead the official probe into the government’s development and use of supply-chain finance, which has a specific focus on Greensill.

He said the fact that Boardman is a non-executive director at the Department for Business, Energy and Industrial Strategy makes him too close to a department with major exposure to Greensill, even though Boardman is standing back from his non-exec role for the duration of the investigation.

“I’ve known Mr Nigel Boardman for 30 years,” Myners said. “I’ve taken advice from him on more than one occasion. He is one of the top lawyers in the City. But he’s not an appropriate person to lead this review.

“He’s stood down from that role, but he’s going to rejoin. That’s sort of half a foot out the door, the remaining one and a half in the door. 

“The department of business is the department that’s cost the government more money with Greensill than any other single department. The accumulated losses from Greensill for the taxpayer, in my judgment, are going to be north of £1bn, of which nearly a half will come as a result of the department of business’s scheme to accredit Greensill as a lender and the coronavirus loan scheme.”

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