Small businesses that have drawn UK Covid loans face the release of names

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

Spotlight on Corruption will on Monday ask a court to order British Business Bank to comply with a freedom of information request made two years ago to publish the names of all companies that had access to the Bounce Back Loan Scheme (BBLS).

During the pandemic, small businesses have borrowed £47 billion from banks under the 100 per cent government-guaranteed scheme. Official estimates say the UK taxpayer has suffered losses of almost £5 billion from fraudsters who have exploited minimal controls around the scheme.

Spotlight submitted an FoI application in 2020 to the British Business Bank, which oversees the scheme, to name all companies that have received BBLS loans. However, the request was denied 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 lenders involved in the scheme they could be forced to publish borrowers’ names. An e-mail from the Financial Times said that if Spotlight won the appeal, it would be “ordered to disclose the details of all or some of the borrowers holding 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 that will cost taxpayers billions of pounds and has been a gold mine for fraudsters.

“Transparency on who is receiving taxpayer-backed loans is key to preventing fraud – if those names had been made public as early as 2020. . . These enormous losses could have been avoided.”

The British Business Bank is already releasing names of companies that have borrowed from other Covid-19 schemes, such as Coronavirus Business Interruption Loans. However, some bankers worry that in the case of BBLS, individuals will be exposed since many of the companies that have used them were sole proprietors with accounts in their names.

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

Another said: “The main issue is personal data. Many bounce back loans are sole proprietorships and they have not signed a prior agreement stating their data could be made public.”

The British Business Bank said the information contained “a significant amount of personal data” when “companies act under their owners’ names”.

It added: “Releasing for free a database of nearly 1.7 million loans and the full details of the companies who obtained them risks providing an opportunity for fraudsters who can use the information to their advantage, for example in identity theft to commit or conduct various social engineering scams.”

The appeal hearing is expected to last three days.


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