Two-thirds of Brits think coronavirus bailouts should have strings attached
Almost two-thirds of Brits think large companies should only receive public bailout money if they agree to conditions such as protecting jobs and reducing carbon emissions, according to polling published today that adds to pressure on the Bank of England.
Financial campaign group Positive Money and pollster Yougov found that 63 per cent of the UK public thinks coronavirus bailouts should come with social and environmental strings attached.
Only five per cent of Brits think no conditions should be attached. Meanwhile 15 per cent think big firms should not be given any money under any circumstances.
It comes the day after criticism of the Bank of England’s coronavirus bailout scheme caused governor Andrew Bailey to commit to reviewing the impact of the BoE’s operations once the coronavirus crisis has passed. Bailey said that now is not the time to impose conditions on struggling companies, however.
The Bank’s flagship bailout scheme, called the Covid corporate financing facility (CCFF), has handed out more than £18bn to some of the biggest companies operating in the UK.
Yet many of those firms are slashing jobs and are big polluters. For example British Airways has borrowed £300m through the scheme but is planning to slash as many as 12,000 jobs.
The Bank of England has made much of its green credentials, but more than half of CCFF funds are going to firms in high-carbon sectors. It has lent £1bn to German chemicals firm BASF, for example, and £600m to oilfield firm Baker Hughes.
Campaigners call for bailout conditions
“It’s clear from the polling that the public has had enough of big business getting bailed out with no strings attached,” she said Danisha Kazi, senior economist at Positive Money, a left-wing group which campaigns for financial reform.
“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.”
Positive Money said companies should have to promise not to lay off workers while the bailout scheme is in place and produce credible net-zero carbon plans.
Bailey, who has been BoE governor since March, yesterday responded to criticism such as this from campaigners and members of the public. He said the Bank had not imposed strict conditions because it has “focused on the immediate priority of supporting the jobs and livelihoods of the people of this country”.
Yet he said the Bank will look at imposing climate-based strings on the Bank’s corporate lending “when the pressure on our resources abates”.
Treasury says schemes are shielding the economy
The Treasury has already imposed some conditions on firms receiving government bailout money. Recipients of CCFF cash are not allowed to buy back their own shares and should “show restraint” on corporate pay and bonuses.
A spokesperson from the Treasury, which sets the parameters for the CCFF lending scheme, said the programme is “directly protecting hundreds of thousands of jobs, supporting some of our biggest companies’ cashflows and enabling them to support their suppliers”.
“Firms applying to our larger loan schemes are subject to various restrictions around dividends and senior pay and we keep all schemes under review.”
Nick King, head of business policy at the free-market Centre for Policy Studies think tank, said: “There is no doubt these are extraordinary times – entire sectors are facing collapse which we know would disproportionately harm the economy.”
“Any support offered must be on terms that protect the taxpayer – that should be the primary requirement of any bailout.”