To ask the Chancellor of the Exchequer, with reference to the provision of loans to airlines by the Government's Covid Corporate Financing Facility, what accountability measures (a) his Department and (b) the Bank of England have (i) in place and (ii) planned for to ensure that those loans are spent on (A) suitable and (B) approved business costs and liabilities.
8 June 2020
The Covid Corporate Financing Facility is designed to support companies who would ordinarily seek market-based finance to strengthen working capital, but find themselves struggling to access financial markets in this uncertain operating environment. It primarily provides bridging support to see through the temporary nature of Covid-19 related disruption, by catalyzing the market for short term corporate funding.
Since 19 May the Government has imposed restraints on capital distributions (including dividends and share buybacks), as well as senior pay, on companies accessing the CCFF. Firms must provide a letter of commitment to these constraints to HMT, which HMT reserves the right to publish if it becomes aware the terms of the letter have not been complied with.
In order to ensure support can be provided quickly, and in a broad-based manner, those are the only conditions imposed on participating firms at this time. Firms must meet strict criteria to access the CCFF so that the Government is confident the funds will be repaid.