BoE bailing out ‘climate criminals and bad bosses’

Airlines receive £1.8bn of public money with no strings attached, oil companies £750m.

London, 4 June 2020 – Research and campaign group Positive Money has called for the government to consider stricter conditions on public assistance to big business, after the Bank of England (BoE) today revealed that a host of socially and environmentally irresponsible companies, including the likes of G4S, British Airways and EasyJet, are receiving billions of pounds worth of bailouts through the Covid Corporate Financing Facility (CCFF).

Launched in March, the CCFF involves the Bank of England (BoE) buying up commercial paper (short-term debt) from investment grade companies with newly created public money. The Bank is offering generous pre-crisis rates on this funding, but the lack of conditions for eligibility has meant socially and environmentally irresponsible companies are being propped up and subsidised through the scheme. The loans are guaranteed by the Treasury, which means the public purse would be liable for any losses under the scheme, potentially tying the government into further bailouts for these companies.

As of June 3 firms are borrowing £16.186bn from the BoE through the CCFF, with the central bank giving the green light for a total of £67.7bn so far.

A £1.8bn bailout has been provided to airlines with no conditions attached, with British Airways (£300m), EasyJet (£600m), Ryanair (£600m) and Wizz Air (£300m) benefitting from the scheme. 

EasyJet announced last week that it will be cutting up to 30% of its workforce, despite accessing £600m through the CCFF. Meanwhile, British Airways is pressing ahead with up to 12,000 job cuts despite state support. Aerospace engineer Rolls-Royce has also tapped the scheme for £600m, despite this week announcing 3,000 job cuts across the UK . 

Also among the high-carbon businesses benefiting from the scheme are oilfield companies Baker Hughes (£600m) and Schlumberger (£150m). 

Other companies with poor social records include G4S, which has accessed £150m through the CCFF, despite its numerous failings on human rights and delivering on public contracts.

After pressure from research and campaign group Positive Money, the Bank of England moved to reveal the companies who are currently drawing on the scheme, the names of which were originally being hidden from public view.

Fran Boait, executive director of Positive Money, said: 

“The fact so many household name brands are drawing on the Bank of England’s bailout scheme, to the tune of billions, reveals just how much big corporations are reliant on the state for survival. In return for assistance on such generous terms, we the public can demand better.

“We really need to ask ourselves whether we should be propping up climate criminals and bad bosses with public money. The government must consider whether conditions which would stop firms laying off workers, avoiding tax, and fuelling the climate crisis, should be applied to these bailouts. 

“We can’t repeat the mistakes of 2008, where the banks got bailed out with no strings attached and the public got sold out. We need to use every opportunity to ensure the recovery from this crisis builds a fairer and greener society.”

Off the back of these findings Positive Money launched a petition, demanding the Bank of England end these no-strings-attached-bailouts. Which is still live, add your name here.

Notes

1. The full list of companies that have accessed funds from the Bank of England through the CCFF so far can be viewed here: https://www.bankofengland.co.uk/markets/bank-of-england-market-operations-guide/results-and-usage-data

2. Positive Money will be publishing a report which explores how socially and environmentally irresponsible businesses are benefiting from the CCFF, including further names not included in the list published today and a more detailed sectoral analysis of where funds are going, later this month.

3. Further information about Positive Money’s campaigning on the CCFF can be found here: https://positivemoney.org/2020/05/press-release-govt-and-boe-comes-clean-on-corporate-bailouts/

4. 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

5. For any questions or for interviews with a spokesperson please contact simon.youel@positivemoney.org.uk or 07817765517