Just 5% think no conditions should be attached to state financial support, as report reveals how the government’s pledge to ‘build back better’ is already being failed by corporate bailout scheme
London, 2 July 2020 – Nearly two-thirds of the UK public think large corporations should only receive bailouts if they agree to protect jobs and cut emissions, according to new polling commissioned by research and campaign group Positive Money, published today.
The polling, conducted by YouGov on behalf of Positive Money, asked UK adults for their views on the government and Bank of England offering financial support to Britain’s largest corporations. 63% of respondents said large corporations should only be given financial support if they agree to certain environmental and social conditions, such as cutting carbon emissions and protecting workers’ jobs.
Only 5% believe that large corporations should be given financial support with no conditions attached, while 15% answered that they should not be given financial support under any circumstances.
The polling comes alongside a new report from Positive Money which warns that the Bank of England’s corporate bailout scheme, the Covid Corporate Financing Facility (CCFF), is already failing the government’s commitment to ‘build back better’. Titled ‘The Covid Corporate Financing Facility: Where are the conditions for the billion £ bailouts?’, the report reveals how Britain’s central back is propping up polluters and subsidising companies making layoffs through the CCFF, which was launched in March to provide privileged financial support to Britain’s largest corporations.
63 of Britain’s biggest companies are currently in receipt of nearly £19bn through the CCFF so far, with more than £76bn earmarked for the scheme in total. Drawing on analysis from ESG consultancy AG, Positive Money’s report reveals that 25 (39%) of these companies have committed to large-scale redundancies, totalling over 34,000 UK-based jobs.
56% of CCFF funds are currently going towards high-carbon sectors, including airlines, car manufacturers, and oil and gas companies. Analysis from AG suggests that more than 6.9bn trees would need to be planted to sequester all of the carbon emitted by CCFF companies in the 2018/19 reporting year – a feat which would require covering an area three times the size of the UK with trees capable of carbon storage.
In addition to the 63 recipients listed by the Bank of England, the report also shines a light on a range of socially and environmentally irresponsible corporations that have also been given access to public money through the scheme, including multinationals such as soft drinks giant Coca Cola and tobacco company Imperial Brands.
Without proper conditions, bailouts threaten to derail the Prime Minister and the Bank of England governor’s pledges to ‘build back better’. The report therefore recommends that environmental and social conditions are attached to public financial assistance, including:
- Requiring that beneficiaries guarantee no lay-offs while the furlough scheme is still in place, as well as inclusion of worker representation on company boards, and union consultation in any future restructuring of the workforce when the furlough scheme comes to an end.
- Requiring that beneficiaries outline credible net-zero carbon plans in line with the Paris Agreement and disclose their climate risk
- Extending restrictions on senior pay to all companies participating in the CCFF, as well as a one year moratorium on dividends and share buybacks.
Positive Money’s report comes as the government is expected to announce details of further bailouts through its so-called ‘Project Birch’ scheme, with campaigners hoping that stricter conditions will be applied to those receiving public financial assistance.
Positive Money senior economist and report co-author Danisha Kazi said:
“With billions in public money already being offered to climate criminals and bad bosses, the government is currently failing on its pledge to build back better.
“It’s clear from the polling that the public has had enough of big business getting bailed out with no strings attached. For most people it is simply common sense that corporations benefiting from public support should protect workers and play their part in fighting the climate emergency in return.”
Alexander Pond, founder of AG, said:
“The pandemic has accelerated the focus on environmental, social and governance. We’re seeing a huge shift from shareholder capitalism to multi-stakeholder capitalism. Companies who addressed ESG through robust supply chains, major standards commitments and strong fiduciary principles have been considerably more resilient to the challenges which industries have been subjected to during the pandemic.”
- All polling figures, unless otherwise stated, are from YouGov Plc. Total sample size was 1,677 adults. Fieldwork was undertaken between 26th – 28th June 2020. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).
- The CCFF involves the Bank of England buying up short-term debt from investment grade corporations at cheap rates (estimated at 0.3-0.7%, which is much lower than rates being offered through other lending schemes) with newly created public money, in a similar manner to quantitative easing (QE). Companies can currently receive up to £1bn each through the scheme, with firms being eligible for an average of over £420m each, and so far making use of around £300m each on average
- Details of the CCFF have been shrouded in secrecy, with the Bank of England originally hiding the names of recipients from public view, until pressure from Positive Money forced the Bank to reveal what companies are currently using the scheme. However, as Positive Money’s report explains,there are still significant shortcomings on transparency, with the BoE failing to provide full disclosure of the total amount of funding corporations have received through the scheme, as well as how decisions to extend public money are being made.
- ‘The Covid Corporate Financing Facility: Where are the conditions for the billion £ bailouts?’ can be viewed in full here: https://positivemoney.org/wp-content/uploads/2020/06/The-Covid-Corporate-Financing-Facility.pdf
- 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
- AG is a UK based global ESG consultancy brand focused on solving the most pressing and complicated sustainability challenges. Founded in 2016, AG provides analytics, insight and analysis for investors, business leaders and global changemakers. https://agsvs.uk/
- To receive the full results of the polling, including breakdown by voting behaviour, gender, age, social grade and region, for any questions or to arrange interviews with a spokesperson please contact firstname.lastname@example.org or 07817765517