Questions as the Bank of England publishes its pandemic bailout list

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• mradey says:

  6 Jun6 June 07:17

  Only 50 odd companies availing themselves of my (enforced) largesse. Who knew making sausage rolls was so expensive… £150 million for Greggs!

  • Mr(s) Entitled says:

    6 Jun6 June 08:59

    If we come through this as a nation and I am unable to get my warm sausage rolls (4 for the price of 3) then that might be the final straw.

  • Nick says:

    6 Jun6 June 09:28

    Perhaps weird, but I actually don’t mind Greggs being on there. They’ve only taken a (relatively) small amount, employ huge numbers of people in the UK, pay their tax, and would definitely pass a ‘public interest’ test (i.e. if you asked an average person whether they deserved support). This money should not have been available to anyone who paid dividends during this time, it really wouldn’t have been hard to impose that rule! Or indeed to exclude companies with only tangential links to the UK, though admittedly that bit might have been harder if the company threatened to leave the UK.

• Sandra Harrow says:

  6 Jun6 June 07:54

  This could be why so many Virgin customers are still waiting for their refunds !

• Dev says:

  6 Jun6 June 07:58

  I think it’s time for HMG to take controlling positions in both BA, Virgin and maybe a low cost carrier as well For the sake of national importance, and spin them into an investment vehicle a la Temasek Holdingsc, (Singapore Airlines) and let them be run by professionals but dividends ultimately end up with the Treasury, and in times of crisis can be Deferred.

  • RussellH says:

    6 Jun6 June 11:13

    A lot of sense here, I think.
    But really important is that day-to-day running of the business be done by people who understand and have experience of the business, not civil servants.
    Also in some circumstances a couple of elected representatives on the board, and certainly a few chosen by the employees.
    Also long past time for companies to be run in the interest of all stakeholders (ie including customers and employees), not just shareholders, and certainly time that AGM votes on board “Emoluments” were binding.

    • AJA says:

      6 Jun6 June 15:04

      Companies should definitely be run in the interest of all stakeholders, I think most successful companies already are and I think directors have a duty to think that way. The trouble is what is in the interests of customers may sometimes conflict with what is in the interest of employees. I do also agree that AGM votes on board remuneration should definitely be binding.

  • Spk says:

    6 Jun6 June 16:18

    Run them with professional managements, but transfer LHR slots to Virgin from BA to ensure they both can survive and are competitive long term.

• Philip says:

  6 Jun6 June 07:59

  I wonder if similar lists are available from other countries for us to see ? It would be interesting to know if any British companies are receiving aid from other govts.
  I got a bounce back loan , which I didn’t presently need , but I read of an example on the BBC web yesterday of a lady who clearly does but was turned down , unfortunately they did not ask the essential question , why ? When it seemed getting the loan was the easiest application for funds you could ever hope for .
  This is a fearfully complex situation and one size will never fit all and trying to account for all circumstances is impossible , I ask for example if I am employed with secondary income that exceeds my salary why I can still get the furlough pay , wheras if I am self employed in the same situation I can get nothing ? Sorry going off topic a bit .

  • The Savage Squirrel says:

    6 Jun6 June 12:20

    I can only think she was an individual and not a business, or failed to fill the form out correctly and ticked yes to some loan-preventing box?

    They literally gave them away – with no risk the banks did not care. Think my application took about 90 seconds…

• Duck Ling says:

  6 Jun6 June 10:06

  Hi Rob, any chance you could update the article with what ‘technical reasons’ regarding VS’s debt structure that forbid it from accessing the government loans?

  • Rob says:

    6 Jun6 June 10:07

    It needed to have existing rated corporate debt in place, which it didn’t.

    • Richard says:

      6 Jun6 June 12:46

      Possibly a little more than a technicality, however. Prior to lockdown, VS did not have an investment grade credit rating, making provision of a state guarantee for them a more risky proposition for Government (ie. HMG would presumably have been advised that they needed to understand Virgin’s complex corporate structure in more detail to assess who would own what if ever the airline went pop). VS had reportedly been trying to arrange a c£750m loan to provide more liquidity, secured against Branson’s remaining 51% shareholding, apparently as an alternative to getting a rating (which would now be near impossible). In other words, the £750m would provide a cash buffer making it much less likely that the guarantee would be needed. If the guarantee has now been agreed, what security has VS been able to offer? If all this means that VS will survive, then that will be good news for customers.

    • Ken says:

      6 Jun6 June 15:38

      I’m not sure this is correct.
      The CCFF specifically has routes for those companies who haven’t issued commercial paper.

      The problem for Virgin Atlantic is that it seems highly unlikely that either Virgins own banks will state that it’s debt is investment grade or the ratings agencies will provide a sufficiently high rating.

• John says:

  6 Jun6 June 10:53

  Pretty shocking to see some of these companies paying out massive dividends yet still receiving bailouts. What’s even more annoying is that there will no doubt be many years going forward of 1% or 0% pay rises in the public sector to pay for it – we’re still paying off all the money squandered on paying massive bankers bonuses over the past decade, with 30% cuts in pay in real terms over the period. The Thursday clapping was all very nice but it’ll be for naught if we’re then left paying for it for years to come.

  • Secret Squirrel says:

    6 Jun6 June 11:10

    We will be paying for all Govt aid to businesses and persons off work for decades probably.

  • jamesj says:

    6 Jun6 June 14:51

    Most local authority pensions are paid from their own schemes it is the likes of nurses, police, fire, civil service that are paid from tax – and many of the Westminster departments still have non contributory schemes which is the real scandal

    • Anna says:

      6 Jun6 June 17:12

      I can see this from both sides, as of course I am now retired! Rates of contributions differ wildly, from police officers who currently pay 14% of salary into their schemes, down to some Whitehall mandarins who reportedly pay 0%. And of course MPs are guaranteed a pension regardless of how long they are in post. The government does nobody any favours, of course, by ham-fistedly implementing reforms which are going to cost more in the long-term, having been ruled to be discriminatory (as in the case of judges, fire fighters and the police). The problem is, of course, that public sector pensions were intended for folk who were worked into the ground and only lived for 5 years after retirement, not chief officers on 6 figure salaries retiring in their early 50s and going to have lucrative second careers as “consultants” in various areas.

    • Harry T says:

      6 Jun6 June 18:21

      Well, there’s few perks to working in the public sector these days, and a pension that’s hacked away at every few years is sadly what we have left. Years of effective pay cuts and worsening working conditions are perhaps slightly mollified by job security and a robust pension. But the previous generations have a much better pension than I have to look forward to.

  • Alan says:

    6 Jun6 June 19:45

    I’m afraid that just doesn’t make sense. Can you imagine if the likes of the NHS scheme was a funded scheme and then the stock market dropped? The amount required to pay for it would be astronomical given the number of staff involved. There are also strict cost caps involved. Plus staff receive sub-inflationary pay awards for many years on the basis that they’ll receive a decent pension in retiral (this is quoted in multiple DDRB reports as a justification).

• Sandra Crawford says:

  6 Jun6 June 12:04

  A lot of people are saying Virgin shouldn’t have a “bail out” because Richard Branson is wealthy. But it’s not about that it’s about how many jobs are at risk if Virgin Atlantic is allowed to fold?
  Yes Branson is wealthy but so are a lot of people who have benefited by furloughing staff taking grants and loans etc.
  It definitely needs rethinking any technicalities can be sorted as I’m sure they have been for a few others!

  • Chris Heyes says:

    6 Jun6 June 13:57

    Sandra@ Nothing to do with Branson being Wealthy more or less
    Two Schools of thought Virgin Very badly run always on the edge of going bust even in really good trading times (and probably will one time), Branson tax exile a lot of people don’t like the fact he won’t pay what people perceive his fair share of “Tax”
    OOOooo and a third a lot of people don’t like him whereas before they did lol

• Rob says:

  6 Jun6 June 14:31

  [Deleted as wrong!]

  • Spk says:

    6 Jun6 June 16:03

    Dividends cannot be paid, if the borrowing is for more than one year and as long as the money is unpaid.

    • Rob says:

      6 Jun6 June 17:37

      I think, having had a dig, that only the actual subsidiary which took the money cannot pay dividends. So, for example, IAG can pay dividends because British Airways plc took the money.

      • Genghis says:

        6 Jun6 June 18:21

        Though more difficult to get cash up to the top of the tree given BA makes most of the cash.

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