Small businesses that used UK Covid loans face having their names published

Small businesses that used UK Covid loans face having their names published

Banks will be forced to reveal the names of small businesses that took out UK government-backed pandemic emergency loans if anti-corruption campaigners persuade a judge next week that disclosure is in the public interest.

Spotlight on Corruption will ask a court on Monday to order the British Business Bank to comply with a Freedom of Information request it lodged two years ago to publish the names of all companies that accessed the Bail Back Scheme (BBLS).

During the pandemic, small businesses borrowed £47bn from banks under the scheme, which was 100 per cent government guaranteed. Official estimates suggest the UK taxpayer faces losses of almost £5 billion from fraudsters who exploited minimal checks around the scheme.

Spotlight submitted an FoI request in 2020 to the British Business Bank, which oversees the scheme, to name all the companies that received BBLS loans. But the request was rejected by the bank, citing a personal data protection exemption, a decision upheld by the Information Commissioner’s Office, the regulator.

This week, the British Business Bank warned the lenders involved in the scheme that they could be forced to publish the names of the borrowers. In an email seen by the Financial Times, it said that if Spotlight were to win the appeal, it would be “required to disclose the details of all or any of those borrowers who received a facility under . . . BBLS”.

George Havenhand, senior legal researcher at Spotlight on Corruption, said: “Next week’s hearing will shed light on government decision-making which will cost taxpayers billions of pounds and has been a bonanza for fraudsters.

“Transparency about who receives taxpayer loans is central to preventing fraud – if these names had been published back in 2020 . . . these huge losses could have been avoided.”

The British Business Bank is already publishing names of companies that have borrowed from other Covid-19 schemes, such as the coronavirus interruption loan. But some bankers are concerned that in the case of BBLS, individuals will be exposed, as many of the companies that used them were sole traders with accounts in their names.

One banker said: “There is a clear conflict between freedom of information and banking confidentiality rules.”

Another said: “The key issue is that it is about personal data. A lot of payday loans are sole traders and they didn’t sign an agreement beforehand saying their data could be released.”

The British Business Bank said the information includes “a significant amount of personal data” where “companies trade under the names of their owners”.

It added: “The free publication of a database of almost 1.7 million loans, and full details of the businesses that have received them, risks presenting an opportunity for fraudsters, who could use the information to their advantage, for example to commit identity theft or to perform various social engineering frauds.”

The appeal process is scheduled to last three days.

Leave a Reply

Your email address will not be published. Required fields are marked *