Greensill scandal: Report by MPs shows it could have been worse. Next time it probably will be

There’s a parallel universe in which the former prime minister David Cameron delivered on the reported $1m a year, or whatever the absurd sum Greensill Capital paid him actually was, and got the firm everything it wanted. Bear that in mind as we discuss the Treasury Select Committee’s report into the collapse of the business, which managed to get in on government loan schemes and into bed with NHS trusts, among other things.

Various estimates have been made about the potential cost to the taxpayer. The Treasury puts this at maybe £6m. Former City minister Lord Myners’ calculations come out at up to £5bn (a figure the Treasury haughtily says it doesn’t recognise).

In reality? Who knows or dares to dream? Certainly not the committee. At the end of its section on costs, it says it’s too early to say because of the current uncertainty about the indirect ones.

By the time it’s not “too early”, this will all have been brushed under the carpet and everyone will have moved on. That will be the case even if Lord Myners is right and it’s £5bn, because the economic fires emanating from the pandemic are so large, and the smoke emanating from them is so thick, they will very effectively obscure it. Which is part of the problem.

This affair saw Cameron buttonholing his former friends, colleagues and underlings across Whitehall, up to and including the chancellor, Rishi Sunak, on behalf of a dubious-looking firm in which he had “a significant economic interest”, even when it was teetering on the edge.

Despite that, the story has still been filed under “complicated” and “Westminster bubble” and that is a mistake.

Taxpayers’ money was blown and sleazy behaviour was engaged in. A parallel reality also exists in which the Treasury and the Bank of England listened to Cameron and looked even more favourably on Greensill’s schemes than they did – which could have made all this much, much worse.

The committee takes a pop at Cameron, wagging its finger at his judgement, the disclosures he made (or didn’t), the rules around lobbying that he didn’t break but which are so weak they’re hardly worthy of the name.

It says there are “lessons” for the Treasury to learn but that “we accept that Treasury officials and ministers behaved with complete and absolute integrity in their handling of Mr Cameron’s lobbying”.

Here’s one of those things that make you go hmm. It says this even while questioning “the firm conviction of the Treasury that the fact that Mr Cameron had previously been prime minister and was personally well connected to those he was lobbying had no meaningful effect on how Greensill’s application for access to the Covid corporate financing facility was dealt with”.

“We are very surprised about this, given that Mr Cameron was an ex-prime minister, who had worked with those he was lobbying, had access to their mobile phone numbers, and appears to have been able to negotiate who should attend meetings. The Treasury’s unwillingness to accept that it could have made any better choices at all in how it engaged in this case is a missed opportunity for reflection.”

That’s diplomatically put. One can’t help but imagine what an Andrew Tyrie, the famously independent Tory backbencher who used to chair this committee, might have said had he still been in charge.

There are some other recommendations that make some kind of sense.

The committee wants regulators to keep a closer eye on the “non-bank” sector given the fondness of some its constituents (like Greensill) for acting like banks.

Having investigated the role of Wyelands Bank, bought by Greensill’s biggest borrower GFG Alliance, members also want regulators to be able to ensure that banks do not fall into the hands of owners who would not otherwise be granted a banking licence.

GFG Alliance is the cluster of companies controlled by steel tycoon Sanjeev Gupta and his family. It bought Wyelands five years ago and pushed supply-chain finance to GFG-linked firms.

This, and problems identified with the business done by the two sides, is all quite techie, but if the techie stuff isn’t sorted out, things can quickly get messy. Remember, there’s a parallel universe in which this was even worse.

Greensill Capital ultimately gave seven loans to GFG Alliance subsidiaries of up to £350m from the government-backed coronavirus large business interruption loan scheme.

Attempts to secure more were kiboshed by the British Business Bank. The bid to tap into the Covid corporate financing facility administered by the Bank of England was also knocked back despite Cameron’s efforts.

But that parallel reality could still ultimately become our reality, and here’s why.

There are several other reports due, including from the Business Select Committee, the Public Accounts Committee and the Public Administration and Constitutional Affairs Committee.

After they’re done, it’s doubtful whether much will change, at least not meaningfully. This has been filed under “complicated” and “Westminster bubble”, the pandemic fires are burning etc.

So we’ll be here again in some way, shape or form – probably a messier and more expensive shape or form.