Names of firms given huge Covid loans will be secret
The names of thousands of companies which benefited from billions of pounds of Covid-19 loans schemes are to be kept confidential under new government rules to only publish state subsidies of £500,000 or more.
The higher threshold has been brought in after Brexit despite warnings that it may hamper the fight against fraudsters believed to have plundered billions from the schemes. The loan schemes have been called a “bonanza for fraudsters”.
Under the EU rules in force until the end of 2020, all pandemic business loans above €100,000 were required to be publicly disclosed with details of the recipients. The new £500,000 threshold for public disclosure of state aid, including pandemic loans, applies from 1 January 2021 and is set out in the government’s subsidy control bill which is going through parliament.
The disclosure rules mean the vast majority of businesses which claim loans will never be revealed. Only 3% of businesses which claimed support under the bounce back loan scheme, the biggest scheme, are expected to be named, according to the British Business Bank, the government-owned bank which delivered the support.
The treasury minister Lord Agnew resigned at the dispatch box in the Lords last month over what he described as a series of “schoolboy errors” in fighting fraud. He said the loans regime was more vulnerable to fraud because of a mix of “arrogance, indolence and ignorance.”
It has been estimated by the government that about £4.9bn was lost in fraud to the bounce back scheme which provided loans up to £50,000 to smaller businesses.
Ministers have not published figures for estimated fraud losses for two other schemes, the coronavirus large business interruption loan scheme and the coronavirus business
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