The government has been criticized by politicians and activists for refusing to reveal the names of companies that have secured government-backed coronavirus loans totaling £ 52.7 billion.
About 1.2 million loans, each with a state guarantee, have so far been approved under programs developed by Chancellor Rishi Sunak to help companies survive the Covid-19 pandemic.
The government has regularly reported the number of loans approved under the programs and their cumulative value, as well as some information on which regions and industries have benefited.
But the Treasury Department and the British Business Bank, the government agency that manages the programs and accredits the commercial lenders, have declined to reveal details of individual borrowers or the amounts they have secured. The BBB cited commercial sensitivities and privacy laws.
The Financial Times has been trying to find out if certain companies have received government-backed Covid-19 loans and have reached out to the Treasury Department and the BBB.
The government’s stance contrasts with the Bank of England, which has disclosed the names of investment-grade credit-rated companies that have used their Covid-19 lending program, under which the central bank purchases its commercial paper. The BoE has also disclosed the amounts drawn by the companies.
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In the United States, where state-sponsored loans were granted to small businesses under the Paycheck Protection Program, the names of borrowers were published, each with more than $ 150,000 in security.
The UK government has three main corporate loan programs with government support. To date, 1.17 million loans worth £ 35.5 billion have been approved under the Bounce Back program, which is aimed at small and medium-sized businesses and is backed by a 100 percent government guarantee.
Under the coronavirus business interruption program, which is aimed at companies with annual sales of up to £ 45 million, a total of 60,409 loans, valued at 13.7 billion, are backed by an 80 percent government guarantee.
Finally, 516 loans worth £ 3.5 billion were approved under the Coronavirus Major Business Disruption Program, which targets companies with annual sales in excess of £ 45 million. Loans come with an 80 percent state guarantee.
Darren Jones, Labor chair of the House of Commons Business Select Committee, said the companies that have secured loans should be identified and the amounts disclosed in ranges.
“Taxpayers will want to know which companies have received public support,” he said. “The state’s relationship with these companies will continue for some time, with the potential for refinancing and debt write-offs. . . This information must be published on this basis. “
Paul Myners, a crossbench peer and former City of London minister in the Labor administration of Gordon Brown, said: “It shouldn’t have been made a commercial sensibility. It could have been made clear and included in the actual loan agreement that the British Business Bank would publicly disclose certain details about the borrowers. “
Duncan Hames, political director of Transparency International UK, a campaign group, said the Covid-19 loans should not be kept secret. “Companies shouldn’t expect to be able to [government-backed loans] without public transparency, ”he added.
The Treasury Department said its support programs provided business lifelines and sheltered jobs.
“We have focused our efforts on providing assistance to those in need in a timely, fair and transparent manner by regularly posting data on applications and loans approved under the loan guarantee programs,” she added.
The BBB said that disclosing the details of loan recipients “may harm their commercial interests” and make lenders less willing to get involved. It added that many of the borrowers were sole proprietorships, whose business name often matched their personal name, which is classified as personal information.
