Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the equity of companies (a) maintaining or (b) increasing (i) dividends and (ii) management bonuses while receiving financial support during the covid-19 outbreak.

The Government acted quickly to deliver an unprecedented package of support measures, well-targeted at businesses in genuine need. It is our expectation that everyone should act responsibly and in the spirit of the package, and only claim and use support as intended.

Under the Coronavirus Large Business Interruption Loan Scheme (CLBILS), borrowers are required to restrict dividend payments and are only allowed to make dividends payments which were a) declared before the CLBILS loan was taken out, b) are in keeping with similar dividends payments made in the preceding 12 months, and c) do not have a material negative impact on the borrower’s ability to repay the loan. Firms borrowing more than £50m will be required to agree to defer dividend payments and share buybacks, alongside restrictions on pay and bonuses for senior management. These restrictions remain in place until the loan has been repaid.

Additionally, Companies accessing the Covid Corporate Financing Facility (CCFF) beyond 19 May 2021, are required to defer capital distributions, pay rises and cash bonuses to senior management. The Government continues to keep all measures under constant review.