London, 19 May 2020 – The Treasury and the Bank of England have today announced that the names of companies being bailed out through the Covid Corporate Financing Facility (CCFF) will be made public, and conditions will be attached, following pressure from research and campaign group Positive Money.
The CCFF allows investment-grade companies to sell commercial paper (short-term debt) to the Bank of England at pre-crisis rates. This meant Britain’s biggest corporations were being given unprecedented access to billions of pounds in cheap funding from the central bank behind the scenes, as the Bank initially refused to disclose the names of beneficiaries, requiring that participants sign a confidentiality agreement.
After a campaign from Positive Money, including a petition signed by thousands of members of the public, the names of the companies benefitting from the CCFF will be published from 4 June. Firms will now also be expected to provide a letter addressed to HM Treasury that commits to showing restraint on the payment of dividends and other capital distributions and on senior pay during the period in which their commercial paper is outstanding.
So far 55 businesses have drawn a total of £18.8bn from the CCFF, with a further £38.8bn to another 68 businesses approved.
Fran Boait, executive director of Positive Money, said:
“The Covid Corporate Financing Facility was serving as a secret bailout vehicle, allowing Britain’s biggest corporations to access public money without the public having to know.”
“It is good to see the government and Bank of England responding to public pressure and coming clean on the firms being bailed out with public money. The new strings attached on dividends and senior pay are also positive, though policymakers should also look into environmental conditions to ensure we aren’t bailing out business models that are incompatible with decarbonisation goals. Our response to the coronavirus crisis doesn’t need to harm our response to the climate crisis.”
- The Bank of England’s announcement can be viewed here: https://www.bankofengland.co.uk/news/2020/may/update-to-the-covid-corporate-financing-facility
- More information on Positive Money’s criticism of the CCFF can be viewed here: https://positivemoney.org/2020/04/government-bailing-out-big-business-with-public-money-behind-the-scenes-through-ccff/
- Positive Money’s petition on the CCFF can be viewed here: https://actionnetwork.org/petitions/bank-of-england-come-clean-stop-secret-business-bailouts-now
- Positive Money campaigns for a money and banking system which supports a fair, democratic and sustainable economy. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of over 65,000 supporters. www.positivemoney.org
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