If the government supported businesses with £50bn of government-backed coronavirus loans then the public ought to know who the recipients are. By not releasing details of the 1.2m that accessed cheap, and guaranteed, state funding ministers are leaving the government open to accusations that it has something to hide.
This charge is easier to make because the default setting of Boris Johnson’s government has been secrecy. Only when ministers have been taken to court, by the Good Law Project, have they been forced to reveal details of public contracts awarded under emergency rules. The three contracts so far made public represent a sliver of the hundreds signed to procure £15bn of personal protective equipment to protect frontline staff. But they already tell a story, says the Good Law Project, of “staggering sums of money, political connections, vast waste on duff product – and most of all a lack of transparency”.
Concealing information does not aid good governance nor do much for trust in ministerial competence. It is understandable that the government wished to support businesses during the lockdown, so that they could weather the storm of the pandemic. But 1.17m loans worth £35.5bn have been approved under the bounce-back scheme, which is aimed at small- and medium-sized enterprises and comes with a 100% state guarantee.
There are only about 1.4m UK private sector businesses with employees. That 80% of UK businesses apparently took advantage of self-certified loans that were granted in 24 hours and for which the state was wholly liable should have rung alarm bells. There are questions here about the nature and extent of the due diligence required by the Treasury and the banks.
To prevent and detect fraud, and to promote transparency, the government must publish the names of companies that received loans. There are no data protection issues or commercial sensitivities to prevent publication. This includes the 60,409 loans worth £13.7bn that have been authorised to companies with sales of up to £45m and the 516 loans worth £3.5bn that have been approved for those with larger turnovers.
The public must be able to see if state cash went to politically connected insiders or was siphoned off into tax havens. Anti-corruption campaigners, led by the Fraud Advisory Panel, warned that without transparency there was a real risk the money would be diverted to fraudsters and that the ease of obtaining loans could see a repeat of the sub-prime mortgage scandal in the banking system.
The stance taken by Rishi Sunak is at odds with the Bank of England, which has disclosed the companies and amounts drawn down under its Covid-19 borrowing scheme. In the US, borrowers that similarly secured more than $150,000 were named. Releasing information on the loans would allow data matching by both the Cabinet Office and rating agencies to see if cash was sent to firms with thin trading histories or directors previously convicted of fraud.
Sunlight is said to be the best of disinfectants, the former US supreme court justice Louis Brandeis once noted, but electric light the most efficient policeman. The jurist was intent on illuminating Wall Street, but the same applies to government today. Knowledge of the facts must be brought home so that voters can rest assured that the state is not being taken for a ride.