The names of companies that benefitted from the UK government’s £41.4bn furlough scheme during the first six months of the Covid-19 pandemic in the UK are being kept secret by confidentiality laws.
Press Gazette has sought disclosure but has run into a wall of silence after a failed Freedom of Information (FoI) request to name every company, including those in the media industry, that used the scheme.
- September 16, 2021
- September 15, 2021
- September 15, 2021
The director of the Campaign for Freedom of Information and the chair of the Public Accounts Committee are among those who have suggested transparency should be a priority when so much taxpayers’ money is in question.
Pressure to reveal the names of companies who benefited from the furlough scheme has been increased by the fact that recipients of furlough payments under the new month-long English pandemic lockdown are being revealed.
HMRC is required to reveal this information under the Coronavirus Act 2020 – but this is too late for the companies that used the first UK-wide furlough scheme.
An HMRC spokesperson said: “Usually taxpayer confidentiality rules prevent HMRC from disclosing details about the affairs of any taxpayer.
“However, legislation for the Job Support Scheme requires HMRC to publish details of employers who have successfully claimed a grant under the scheme.”
HMRC says it is prohibited from naming the companies that used the first job retention scheme, even under FoI, by section 23(1) of the Commissioners for Revenue and Customs Act 2005 (CRCA).
The legislation prohibits the disclosure of revenue and customs information relating to a “person”, which includes legal entities such as companies, trusts and charities, if making it public would identify them.
HMRC also told Press Gazette its standard “duty of confidentiality under section 18(1) of the CRCA removes any possibility of disclosure on a discretionary basis”. Section 19 makes wrongful disclosure a criminal offence.
FoI directory What Do They Know shows that others received the same response from HMRC to similar requests for information.
One requester argued that the US had released detailed information on the amounts received by more than 660,000 small businesses under a similar scheme, adding: “UK taxpayers should be entitled to the same degree of transparency, and it should be possible to provide this whilst protecting sensitive information relating to individuals.”
Section 20 of the CRCA makes provision for disclosure in the public interest when cleared by one of HMRC’s commissioners if it is “for the purposes of the prevention or detection of crime”, but the release can only be to an official body.
The chair of the Public Accounts Committee, Meg Hillier, has backed greater transparency and urged the government to publish a list of those who benefitted from the scheme, especially as there are fears £3.5bn paid by mid-August may have been fraudulent or paid in error.
‘Transparency should be a given’
Hillier said: “Our finding of the astonishing lack of economic planning for a pandemic shows how the unacceptable room for fraud against taxpayers was allowed into the Government’s hastily drawn up economic support schemes.
“I would like to see the government publish a list of the companies which received furlough money. Where taxpayers’ money is being used, transparency should be a given. HMRC must act now to minimise fraud and error and ensure that taxpayers do not pay time and time again in the years to come.”
Campaign for Freedom of Information director Maurice Frankel told Press Gazette he was not surprised by the HMRC’s strict statutory provisions but suggested there should be public interest exemptions.
He said there are a “series of prohibitions of this kind in different statutes including one that applies to virtually all information that HMRC holds” and that these amount to a “blanket thrown over everything in the category with no exception, however strong the public interest”.
“This looks like one of those cases,” he said.
“On the whole it isn’t a matter of great tax confidentiality and there is a strong public interest in knowing how the provisions are being applied at the moment but the way in which the FoI Act and the statutory provisions are drafted just rules that out.
“There are lots of things in this area which you could make a good public interest case for. If you think that a company is doing a Trump and effectively finding ways of not paying any tax at all, you can’t discover that via HMRC, you can only discover that if a company puts that out themselves.”
HMRC has been able to publish anonymised data tables since June that include a breakdown of the take-up of the furlough scheme per sector and region.
Some 38,700 employers in the information and communications sector were furloughing 115,700 employees on 31 August, according to the latest data available.
The only way to know if a company used the furlough scheme is if they announced it themselves, if the information was leaked from staff, or if the figure received appears in any company accounts.
Misbehaving companies should be ‘named and shamed’
Mike Dodd, former legal editor at PA, told Press Gazette: “I can understand the need for confidentiality in relation to our personal tax records.
“That said, the problem with this confidentiality imposed on our public services is the only way they can raise issues is by doing it through official channels and as has been shown in previous cases, for example mistreatment of patients in hospitals, official channels don’t always work.
“Sometimes there is a need for stuff to be dragged out in public.”
Referring to concerns that some companies may have misused the scheme by putting staff on furlough but asking them to work, Dodd said: “If that is the case that should be out in public. If companies are misbehaving and taking taxpayers’ money then I think they should be named and shamed.”
Dodd added: “This obviously wasn’t a situation which was envisaged when the legislation was put together and wasn’t something that was considered when the coronavirus legislation was put through so they haven’t thought of the public interest in knowing who’s misbehaving or at least how much misbehaviour there is.”
Media companies that furloughed staff, allowing them to receive up to 80% of their usual salaries while not working to mitigate challenges posed by lockdown, include Reach, Newsquest, JPI Media and the publishers of the Guardian, City AM, Evening Standard and the Independent.
Mail, Metro and i publisher DMGT, and Times and Sun publisher News UK both avoided using the scheme at all.
The Spectator, Telegraph and magazine publisher Future have all paid back the furlough money they received after faring better than expected during lockdown.
Further call for transparency on emergency loans
Charity Spotlight on Corruption has submitted a complaint with similar implications for transparency to the Information Commissioner’s Office after the Government turned down an FoI request for the names of those who have received Covid-19 loans.
The National Audit Office has shared concerns of the potential for fraud through the Bounce Back Loan Scheme, which had paid out £36.9bn by 6 September.
Spotlight on Corruption said an FoI request to the British Business Bank was rejected and that in response to its request for an internal review, which was also turned down, the BBB admitted publishing who received loans “may help identify some possible cases of fraud”.
The charity said BBB nevertheless invoked Section 43(2) (commercial interests), Section 40 (personal data) and Section 31 (prejudice to law enforcement) of the Freedom of Information Act in rejecting the request.
It has appealed the case as it believes there is “a clear public interest in releasing this data” and said the UK could learn lessons on transparency from the US, which published the names of companies that received loans over $150,000 under a scheme to help businesses through Covid-19.
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