While small and independent businesses are struggling to survive, the Bank of England is creating billions in new money to bail out Britain’s biggest companies – in secret. As public money we deserve to know where this is being spent, so today we’re launching a petition to demand the Bank lift this veil of secrecy.
As part of their activities to combat the economic fallout of Covid-19, the Bank of England has created a new scheme called the Covid Corporate Financing Facility (CCFF), to specifically support the UK’s biggest companies impacted by the crisis.
The Bank of England specifically said companies receiving or eligible for funds “will not be made public” and businesses are being made to sign confidentiality agreements. So far they’ve handed out more than £11 billion in bailouts with another £30 billion agreed – almost all of it hidden from public view. We’ve only learnt about a handful of company bailouts (to EasyJet, Greggs, Redrow Homes and First Group) backhandedly through the press. And, to access the scheme, companies must be deemed to make a material contribution to the UK economy and have an investment-grade or sound long-term rating from a big credit rating agency – making the CCFF a highly exclusive facility.
If a company meets these requirements, the Bank then purchases an amount of short-term debt from the company with brand new money it creates entirely for this purpose. This is public money pure and simple, we deserve to know where it’s being spent.
During this time of crisis, the Bank of England must lift it’s veil of secrecy and make all it’s business bailouts public now. Please sign our petition today!
Here’s what we’re asking the Bank:
Dear Andrew Bailey,
The coronavirus pandemic is causing an unprecedented economic crisis which is impacting every part of the UK economy. Whilst we greatly applaud the Bank’s speedy response in trying to counter the impacts of this economic shock, we find certain aspects of your recovery measures worrying – first and foremost the lack of transparency surrounding the Corporate Covid Financing Facility (CCFF).
In your information for those seeking to participate in the CCFF, the Bank of England stated “names of issuers and securities purchased or eligible will not be made public.” This in effect means there can be no public oversight of which firms are being bailed out with public money via the scheme.
As of 22 April, the Bank of England has bought £11.218 billion of short term debt from 35 companies via the CCFF, but because of the secrecy surrounding recipient firms, less than 20% of this has been accounted for. We’ve only learnt where a small fraction of this huge sum has ended up from reports in the media, and not from the Bank of England’s own publication.
The need for transparency is also compounded by the absence of any social and environmental conditions attached to CCFF support. With deals being struck outside of the public eye there is no chance for democratic scrutiny which runs counter to the Bank’s own position as a public institution intended to promote the good of all people of the United Kingdom.
In the interests of transparency and oversight, we’re asking you to lift the veil of secrecy and publish the full list of companies which are being bailed out with public money via the Covid Corporate Financing Facility, and remove the requirement for firms to sign any kind of confidentiality agreement going forward.
Please sign our petition today.