The Bank of England issued a press release this morning saying that new conditions have been attached to their coronavirus crisis funding facility (CCFF). As they said:
Over 230 businesses are currently approved as eligible to access the CCFF. The facility has supported £18.8bn of lending to 55 businesses and authorised a further £38.8bn of potential lending including to another 68 businesses that make a significant contribution to the UK economy. The CCFF will continue to allow businesses that can demonstrate that they were in sound financial health as at 1 March 2020 to borrow from the Bank of England by issuing short-term commercial paper.
The update announced today is the result of continued close cooperation between HM Treasury and the Bank. It aims to promote the ability of companies to repay their borrowings from the facility in an orderly way after the Scheme closes to new drawings in March 2021. The update has two main components:
First, all businesses that wish to draw from the CCFF for a term extending beyond 19 May 2021 will 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. These commitments are intended to create incentives for, and promote the ability of, businesses to repay their borrowings from the CCFF where they mature after the Facility is expected to close.
Second, businesses that have drawn under the CCFF are now able to repay their drawings early if they choose to do so. This gives businesses greater flexibility to exit the Facility in an orderly way where they are able to access alternative sources of funding, for example in capital markets.
So, it is possible to attach conditions to lending, after all.
But apparently it's not possible to ask that businesses enjoying £57.6 billion of funding do:
- Publish their accounts on a country-by-country reporting basis so we can understand their use of tax havens;
- Provide written explanation by country as to why they do not pay the expected tax rate of that jurisdiction;
- Have a rigorous tax policy in place that ensures that tax avoidance does not take place.
Which is pretty odd when the companies in question will all be in possession of this information already.
Why is it that the Treasury is so unkeen for us to know about the tax affairs of large UK companies? What have they got to hide?
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“First, all businesses that wish to draw from the CCFF for a term extending beyond 19 May 2021 will 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”.
Unless such letters of intent have the force of law any so called promise amounts to nothing. Also is it true that the identities of those companies receiving such help will be kept secret? Secrecy (as opposed to privacy) is an abusers charter.
They are being kept secret – which is absurd
The Treasury, along with the DWP with whom I yet remain in conflict over my PIP application, strikes me lately as being another govt department which has gone rogue and needs to be broken up. The DWP seems to work largely for the benefit of the American insurance companies, employing their established tactics to deny due payouts to the obviously deserving, and the Treasury lately appears to be working largely for the benefit of large corporations using tactics such as those above. And don’t get me started on the FCA… time it was either all cleared out, which would need the political will, or ignored. Increasingly, I seem to see signs govt is being ignored and local solutions are being found independent of govt, councils banding together to create munis, for example, and organisations co-operating across multiple regions to ensure the provision of food to those who might otherwise go without. The absurd Boris has his uses, it seems, as his glaring lack of leadership and continuing absences are encouraging self-sufficiency in those whose interests he so conspicuously fails to take into account. Boris; good for something. Who knew?
£57.6Bn given or committed. It does not appear that this is going to reach the £300Bn+ the Government originally proposed in the halycon days when they actually, if risibly believed they knew what they were doing; and that was without any conditions.
This betrays the increasing anxiety of a neo-liberal Conservative Government to hurry everyone along to establish the culture and values of ‘business-as-usual’ as soon as possible (whatever the reality), because even they detect that it is all slipping away from them, very, very quickly. They know not what they do, or to do, or where this will end; and to paraphrase Donald Rumsfeld: they know, they know not what to do, and they know, we know, they know not what to do; and we know, they know, we know, they know not what to do.
At least Donald Rumsfeld knew what he was trying to say!
We know, they know not what to do; they know, we know, they know not what to do; and we know, they know, we know, they know not what to do.
Americano for you, Richard?
I like it
I could definitely have an Americano to that…..
It may go to Twitter, with apologies….
No apologies required. I could bumble for Scotland.
Cheers!
🙂
Given the average borrowing of £468 Million, large company accounts filed at the end of the calendar year should be interesting – or do you think it will be (arranged to be) difficult to disentangle? Even for those with no use of tax havens?
Either way, it is scandalous and should be probed by MPs on the Treasury Select Committee.
I think it will be fairly obvious…..it should be
I agree that firms who use tax havens to avoid paying their due contribution to the Commonweal they profit from should have no recourse to the taxpayers or the public purse.