What just happened
Long stories short
- Sanjeev Gupta’s companies are scrambling to stay afloat after the British government turned down a request for a loan. More on this and the fall-out from Greensill’s collapse below.
- England took another cautious step out of lockdown, allowing outdoor meetings and sport.
- Dozens died after a siege by Islamist militants of the town of Palma in northern Mozambique.
Access to finance
Someone in the UK Treasury seems very keen to leak documents about the British government’s relationship with the collapsed financial services company, Greensill. They leaked some more yesterday to the Sunday Times, almost as if they want the blame for trouble ahead to land firmly on the head of a previous regime: the saga could end with potentially significant job losses at Liberty Steel and other parts of Sanjeev Gupta’s GFG Alliance.
The main target so far has been David Cameron, a paid adviser to the company: did he abuse his position as a former prime minister by lobbying for Greensill to get access to government-backed pandemic loans? But the longer the saga goes on, the more the mystery draws in Cameron’s adviser and gatekeeper – “the greatest civil servant of his generation” – Sir Jeremy Heywood.
In a nutshell:
- Greensill specialised in supply chain finance: in theory a way to speed up payments from big businesses to small (they’d get the money immediately rather than waiting 30 or, in some cases, 180 days); in practice, it also became a mechanism for some big companies to obscure the true level of their debts. Greensill collapsed after its insurers pulled the plug.
- The mystery is why the UK government drank the Kool-Aid about supply chain finance within the public sector. If it was worried that small businesses (like pharmacies servicing the NHS) were getting their money too slowly, why didn’t the NHS just pay them faster rather than using an intermediary like Greensill? Gordon Brown, then prime minister, mandated payments in five days but neither his government nor subsequent ones ever hit the target.
- Sir Jeremy Heywood, who died in 2018, was venerated around Whitehall. He talent-spotted Lex Greensill, gave him a desk in 10 Downing St and a rolodex of government contacts. It was a huge break for a young financier, and set him on his way to becoming a paper billionaire. Anyone who knew Sir Jeremy will assume he’d seen something important which needed to be fixed but the leaks paint a picture of confusion among senior civil servants: what problem did he think Lex Greensill was solving?
Doing business with government wasn’t where Lex Greensill earned his money – it was a drop in the ocean compared to his later dealings with Sanjeev Gupta – but it was an important launchpad for what followed. Greensill took the unglamorous business of supply chain financing and turned it into something flashier and riskier. The British government helped him on his way.
Wealth investment, fairness, prosperity
The US “vertical farm” company AeroFarms has announced that it’s planning to go public with a valuation of $1.2bn. Its sales will be just $4m this year so the price tag looks steep, but the explanation is the huge excitement about vertical farms as a way of solving global hunger and de-risking the food chain. Vertical farms are barns filled with crops grown without soil under artificial light in stacks from floor to ceiling. So far, critics point out they’ve mostly grown salads and garnishes. The challenge ahead is to prove that they can move from the edge of the plate to the middle.
New things technology, science, engineering
At Tortoise, we’ve been excited about Oumuamua. Was it – a shiny, cigar-shaped object which flashed across our telescopes in 2017 – an alien vessel visiting our solar system as the Harvard astronomer Avi Loeb speculated? (You can watch Loeb’s ThinkIn here and listen to our Sensemaker podcast here). Two astronomers from Arizona State have just delivered a more mundane explanation: Oumuamua is a broken-off piece of a Pluto-like planetary body. It’s shiny because it’s made of frozen nitrogen, and it’s cigar-shaped because it’s melting. It’s effectively become the shape of a worn-down bar of soap. That’s about as mundane as astronomy gets.
Belonging identity, society, beliefs, countries
Showtime in Scotland
There’s nothing straitlaced about Scottish politics at the moment, and Alex Salmond’s new venture – a party called Alba – adds to the weirdness of it all (despite being rolled out in a conventionally smart way, with strategic defections by SNP MPs). Alba has already hoovered up the fringe party, Action for Independence, run by Tommy Sheridan, the former Labour activist who was jailed for perjury in 2011. On the sidelines, Salmond still hosts a talk show on the Russian propaganda channel RT; so does former Celebrity Big Brother contestant George Galloway who heads an anti-independence party, All for Unity (formerly Alliance for Unity). The old centre in Holyrood is increasingly surrounded by a political circus. As for what Alba will do to the SNP in May’s elections, here’s a ready-reckoner: if it gets more than 7 per cent of the vote it might help the SNP; below 6 per cent it probably hurts it. The smart money’s on the latter.
Our planet environment, natural resources, geopolitics
Fomin at the head
As the death toll mounts in Myanmar, the international chorus of indignation is matched by a striking acceptance of the outside world’s impotence. One significant reason was symbolised by the presence of the Russian deputy defence minister, Alexander Fomin, at Friday’s Armed Forces Day parade, before violence against the protestors killed 114 of them (according to the respected news site Myanmar Now). “Russia is a true friend”, said Myanmar’s de facto leader Min Aung Hlaing. Putin’s Russia has been assiduously courting the Myanmar generals with arms deals, and its support, with China’s, means the UN Security Council is a dead end on the issue.
The 100-year life health, education, living, public poliCY
Bridge to nowhere
No small feat by salvage crews to refloat the Ever Given. It’s pointing dead ahead now and small boats have already shuffled past it on their way up the Suez Canal. The website gCaptain has been a source of wisdom on the stranding and its founder, Captain John Konrad, tells the Atlantic that the lessons of the accident may never be learned. On average, as many as 100 large ships are lost at sea every year (who knew?) and groundings in the Suez Canal are not uncommon. Some years, by contrast, no large passenger airplanes are lost, so there’s been pressure on the maritime industry to put safety monitoring onto the bridges of ships like they have in airplane cockpits. Up to now, no dice. Time to float the idea again.
the week ahead
29/3 – groups of six able to meet outdoors in England from today; Megabus and National Express services resume; ONS publishes analysis on vaccination rates by socio-economic group, 30/3 – Ada Lovelace Institute publishes final report of the Citizens’ Biometrics Council; ONS publishes antibody data, 31/3 – shadow foreign secretary Lisa Nandy speaks at Chatham House webinar on UK foreign and domestic policy; quarterly UK GDP estimates, 1/4 – newly formed pro-independence Alba Party, led by former Scottish first minister Alex Salmond, holds launch event for national candidates in upcoming elections; ONS publishes estimates of prevalence of long Covid; Welsh lockdown restrictions due to be reviewed, 2/4 – Good Friday; stay at home measures in Scotland due to be lifted, 3/4 – five years since British-Iranian Nazanin Zaghari-Ratcliffe detained in Iran, 4/4 – Easter Sunday
29/3 – trial of Derek Chauvin, accused of killing George Floyd, begins; European Commission president Ursula von der Leyen chairs EU RECOVER meeting, 30/3 – Land Day marked by Palestinians worldwide; climate activist Greta Thunberg speaks at Financial Times live event on the race to net zero; International Criminal Court issues appeals judgment in the case of Bosco Ntaganda, Congolese general found guilty of 18 war crimes, 31/3 – BioNTech CEO speaks at WIRED HEALTH annual conference; court hearing for rapper Cardi B, charged in connection with attack on two bartenders at a New York strip club; deadline for South Africa “state capture” corruption inquiry, 1/4 – Iran marks anniversary of the establishment of the Islamic Republic; 45 years since Apple founded
And finally… if you need something uplifting on a grey day, knock yourself out with the New York Times’s interview with Merry Clayton. One of pop music’s great backing singers (close your eyes and hear her with Mick Jagger on ‘Gimme Shelter’) she lost both legs in a car accident a few years ago. Her new album is a triumph over adversity, a reclamation of centre stage, and balm for the soul.
Thanks for reading, and do share this around.
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What you think
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