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Local News

UK steel must ‘not pay price of failures of troubled Greensill Capital’

today14/04/2021

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The UK steel industry must not pay the price for the failures of collapsed lender Greensill Capital, a Yorkshire MP has said, amid a growing cronyism row engulfing the firm.

Shadow Cabinet Office minister and Leeds West MP Rachel Reeves highlighted how thousands of steel jobs across Yorkshire and elsewhere faced the axe in light of the company’s decision to file for administration last month.

Greensill Capital was the main backer of Sanjeev Gupta’s Liberty Steel, which owns plants across the UK including in Rotherham and Stocksbridge, where jobs are now at risk.

The fortunes of Greensill Capital have come under the microscope after the close relationship between its founder, Lex Greensill, and former Prime Minister David Cameron, came to light.

To get the latest email updates from Yorkshire Live, click here.

During Mr Cameron’s time in Downing Street, Mr Greensill was given access to government as an unpaid senior adviser in the Prime Minister’s office.

In 2018, Mr Cameron then joined Greensill Capital as an adviser – two years after he stood down as PM.

It has now has emerged that last year, he privately messaged government ministers, including chancellor Rishi Sunak, for Covid-related financial assistance for Greensill Capital – prompting a fierce backlash and accusations of “sleaze” and “cronyism”.

The former PM wanted the Treasury to give Greensill Capital access to the government’s Covid Corporate Financing Facility, which was later rejected. However, the firm was able to sign up to a scheme known as the Coronavirus Large Business Interruption Loan Scheme, which allowed it to make state-backed loans of up to £50million at a time.

Mr Cameron broke his silence on the controversy earlier this week in which he defended his actions but admitted he should have contacted ministers through “only the most formal of channels”.

During Prime Minister’s Questions on Wednesday, Boris Johnson admitted he shared the concerns about Mr Cameron’s conduct and highlighted how the government had announced a review into the issue led by lawyer Nigel Boardman.

However, the Labour party has said it fears the review will be a “whitewash” and has instead called for a parliamentary inquiry, which would be held by a new select committee of MPs with powers of summons.

Speaking ahead of a vote on the setting up of an inquiry, Ms Reeves said: “Let’s be really clear.

“David Cameron was not working in the national interest, but in his own personal interest, with the hope of making millions of pounds for himself.

“But questions cannot just be asked of David Cameron when it is current Conservative ministers who have paved the way for this scandal.

“Mr Speaker, when it comes lobbying it takes two to tango.

“For every former minister lobbying, there is someone in power being lobbied.”

She added: “This is why this scandal isn’t just about the conduct of David Cameron during his time as Prime Minister and in the years since then.

“This is about who he lobbied in the current government and how they responded.

“Lex Greensill was awarded a CBE and made a Crown Representative by a Conservative government, yet his company’s spectacular collapse now means over 55,000 jobs are at risk around the world including thousands in the UK’s steel communities – from Hartlepool to Stocksbridge, from Rotherham to Scunthorpe and Newport.

David Cameron lead the Tories to victory in the 2015 General Election
David Cameron has admitted he should have gone through ‘formal’ channels

“Their work is vital, the steel industry is crucial and the current government must make clear that our steel industry will not pay the price for the failures at Greensill and beyond.”

Richard Burgon, the Labour MP for Leeds East, said the “rot actually runs much deeper” than just the Conservative party.

“The scandal of the former Prime Minister lobbying the government for his new boss has rightly captured the headlines, and I have to say that the attempts of some of the Tory MPs to ride the high horse in this debate really is quite rich because the rot actually runs much deeper,” he said.

“The whole system is rigged in the interest the super rich, and the super rich spend a lot of money making sure that it stays that way, and in the Tory party, they have the perfect vehicle for this.

Leeds East Labour MP Richard Burgon
(Image: PA)

“The pandemic casts more light on some very questionable practices. While it’s 37 pence benefits increases, wage cuts and millions of public sector workers and tax rises for millions, some on the other hand, have had a very good pandemic indeed.

“Vast sums handed over to Serco and the like, funds that should have gone to our national health service, companies with connections to top Tories 10 times more likely to get Covid contracts than those without such connections; the health secretary’s mates, the landlord of his former local pub, winning -winning – a Covid test contract worth a small fortune – I could go on.”

Responding to Ms Reeves, Tory Cabinet minister Chloe Smith said the government was not “complacent” about lobbying.

“Neither about the scale of this challenge nor about taking action where necessary to uphold the public’s faith in what we should all stand for,” she added.

“Since 2010 under the coalition and then under Conservative governments we have significantly increased the transparency on the workings of government which the public should rightly be able to expect.”

She added: “The information that has emerged in recent weeks about Greensill Capital has done so in some part because the system in place is doing its job and ensuring the support of transparency and accountability.”

Written by: Rother Radio News


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today14/04/2021


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