 So as I've been saying companies bailed out with public money your money have paid shareholders billions of pounds not millions Billions of pounds in dividends while cutting tens of thousands of jobs in the UK. This is a vice news investigation and Ben Smoke a contributing editor at Huck magazine and the journalist behind this investigative report for vice news joins me now Ben Hi Nick, how are you? Good. Thanks. So what have you found? Yeah, so as you said companies accessing the COVID corporate financing facility, which is one of a number of kind of bailout funds and facilities brought in by Chancellor Wysiu Sunak in March to deal with the impending corona economic crisis Companies and I should say the companies that are accessing this are only the largest and biggest companies So they have to have had an investment grade as of March the 1st of this year and also make a material contribution to the UK economy They apply to the Bank of England who are administering the funds for the Treasury and then they decide yes You you are your your eligible to have some of this money Which is accessed through what's called commercial paper, which is a form of debt. It's a loan But it's incredibly favorable terms So these these loans are given a 0.2 to 0.6 percent interest and to kind of give you an idea of how favorable that is some of the other loans that other small much smaller companies that are able to access the Up to six percent some of them I've seen a nine percent in interest And so these companies these massive companies with billions and billions of pounds of revenue going through Their bank accounts each year have accessed as you said billions of pounds eighteen point nine billion pounds of public money at a time when People across the country are losing their jobs. They are starving And yeah, as the investigation that we did found that thirty percent of those at the time of weeks obviously companies can Pay them back early. So at the time when we did the investigation There were 68 companies that had funds out through the CCFS 30% of those had paid dividends To shareholders and we found out that eight of them had paid dividends after receiving this government money and Three of those companies are eight of them. Sorry Had paid have paid the dividends out and then laid off starts. Oh, this is this is a scandal as far as I'm concerned I'm sure as far as all of your listeners are concerned as well. Well, let's just Think about what we're talking about because you you're saying that the companies that are being lent the money They are you know highly upstanding very well Backed companies But they they seem to be on a solid footing But could you not also have said that of Bear Stearns and Enron and Northern Rock and RBS and all of these giant corporations that fell over with With devastating consequences The a company looks good until it doesn't look sure absolutely and you're without doubt Coronavirus is I mean, you know the figures that came out today As much as the Bank of England were kind of trying to dam like dam them down They they are damning they expect that GDP in this country is going to fall one by 9.5% Which are buying today released figures that indicate that the UK recession this year is going to be the worst in 1710 Predicting an 11.5% contraction of our economy. So we absolutely can't be too careful where They're protecting jobs is concerned and I really think that last bit is the most important part and when you say These companies look good until they don't Absolutely, I completely take your point there But if we look at a company like Schlumberger who is an oil giant who posted 33 billion pounds of revenue in 2019 When I went to them and said to them hi Writing this piece. I've seen that you've taken this money. I've seen it. You've also not only paid out dividends, but you're planning on Cutting up to 90 jobs that one of your subsidiaries in Scotland. Do you have any comment on that? All they did was point me to their quarterly their second quarterly results Which showed that the company reported 5.2 billion pounds in worldwide revenue Well, that doesn't seem to me like a company that really should be at this point in time Should be the priority for the Chancellor. It's it's also the case, isn't it that it's against the Greening of the economy to support companies that are dealing in fossil fuels Absolutely, and you know within this sort of list of companies you've got four airlines who have been supported And I think I reported on an action that was done by the UK student climate network who have been Doing the amazing work of it around the climate strikes every Friday in this country They didn't action last month outside of the Bank of England and the Treasury kind of pointing this out And the Bank of England were due to implement a review into their financing to make sure that their financing was kind of in line with The Paris Agreement and with the gravity of the climate crisis Well, Andrew Bailey the governor of the Bank of England said they didn't implement that on this this finance on this this COVID corporate financing facility because the The priority at that point was to protect the jobs. I mean that clearly isn't true. Is it because Yes, quite if that was the intention then they failed in that regard, but let's just back off a moment and and Look at the conditions that were attached to the money that was handed out virtually zero percent Interest what conditions did Rishi Sunak attached to this money if any Well, there weren't there weren't any and I think this is this is really the scandal I mean apart from you know, the obviously the obvious condition that one has to pay back alone, but there were no Economic or environmental stipulations Attached to this and I think that you know, obviously the paying of dividends is You know is deplorable and you know fundamentally if a company has enough money to put Millions of pounds in the coffers of shareholders Then it certainly has enough money to pay it stuff and keep it stuff on board But actually this is much wider and it's much bigger in terms of that Instance where Rishi Sunak and Andrew Bailey chancellor and governor of Bank of England decided not to implement any stipulations whatsoever and as I said these companies are you know, they are made up of some of the biggest polluters Ryan air for example is Another company who've got access to money through this fund They've been listed as one of the top 50 polluters in Europe. We're not talking about kind of little Yeah, little things here and it really does sort of beg a belief that the chancellor hasn't taken this opportunity to Restructure society knowing that we have less than 10 years to avert Immovable climate crisis something that will never come back from that will see the extinction of the human race and is already seeing Death across the global cells. It's it's criminal. Well, let's think about the The the element of paying back, of course, that he's not giving them the money They do have to pay it back at some point in the future. So people might think well, what's the big deal? Of course, and you know, they do and when they first took out it was on They had to pay it back in a year They the Bank of England now indicated that they can and I should say also the Bank of England on the 19th of March He's announced that any companies accessing money after that point Would have to provide a letter saying that they were going to show restraint where paying dividends and Executive pay but is that is that not completely meaningless? What does that mean show restraint? It's completely meaningless and you know what show restraint in terms of what in terms of Compared to what I mean exact. I mean I'm restraint Financial restraint as far as I'm concerned. I'm sure it'd be completely different to what your average CEO might consider Well, exactly. And I think what this is shown is the kind of the rock in wider society and this this idea that we must protect Which what essentially we're doing is we're protecting the profits here, aren't we? We're protecting the profit margins by giving this money and yes, you're right It is alone and it is it will be paid back and there are some companies like am called which we reported on in the piece Who have they did pay back their loan last week? But the fact is that this money had to be used by the government It had to be found and given to these companies at a moment I think was the the trust or trust said that in the first couple of weeks of lockdown They gave up 50,000 food parcels to people that had no access to food And that was that was a time when the government was finding these billions of pounds to bail out these companies I think it's it just all begs belief. Does it also not My knowledge of things financial is a bit thin But once this money has been Created essentially they just invented out of nothing don't they and then they hand it to these companies and they then take that That money that doesn't exist and then they when they award it to themselves as the dividends and bonuses and so on then It does become real because they actually have that money to spend in their accounts Does that not also have economic consequences for the future that all of this extra money that has just come from nowhere and has to found itself into the Bank accounts of What you could describe as the 1% Well, I think yeah, there are a couple of points that firstly it exists as soon as the commercial paper is issued as soon as that happens There is an injection of cash I mean the average payout was 300 million pounds some companies like fast who are you one of the biggest Companies in Europe got a billion pounds from this fund as soon as they issue those commercial papers that money exists in their accounts And then when we're talking about them sort of paying it back to themselves Yeah, obviously that has implications and the implications are as we know from decades of You know the society being as it is that money doesn't come back down to the people going out to work And then losing their jobs struggling to eat struggling to send their kids to school Because you know for example travelers being caught in London All of those sort of things that money just stays in these offshore accounts. No, they were So I can't quite remember the figure now, but there are there are companies on this list that have been linked to tax havens They have you know, they're their sort of ultimate parent company are registered in places like the Netherlands or the Bahamas All of which are, you know, well-known tax havens. Yeah, so what we're talking about here is the sort of money disappearing out of the cost is of the Treasury I find when people in this country really desperately need it and ending up sitting up in These the bank accounts of as you said the 1% and you know, the dividends are going out in terms of easy jet For example, they paid out and to be fair to them They did try and get out of paying their dividends and they legally couldn't so they ended up paying out tens of millions of pounds Individend to their founder Stelios who is well-known billionaire Who then went on the attack when people were questioning that in March at the time when we were going into lockdown saying well Why should I give this money back? Why should I do that? I really do think to fundamentally that shows part of the problem here and people like that who are saying Why should I give the money back when there are people on the street starving? And there are tens of thousands of people in this country about to die from this virus really shows the disparity We're in coronavirus. I remember interviewing Salute cabinet minister at the time and we were talking about something different and I remember him saying to me Corona virus is going to be the great leveler because it's it's it's going to hit people and and it will take people out And it'll be irrelevant of who you are and fundamentally we've seen that that's not the case Yeah, you know, we know that it's obviously hit same communities much harder We know that it's hit people on the front lines much harder these people who are giving interviews from their Villars in Marbella or from there. They're such a pay bill is they're not being hit by it No, they're getting is dividends paid from government buffers while all of their workers are being laid off and starving Fighting for their lives against this virus and you just to interrupt just just finally you said that you know This money is to prop up the companies and to ensure their profitability and their long-term health But that actually isn't what's happening. Is it the money is going straight through the companies to the shareholders and the CEOs and The company itself has to then find extra money To pay it back. So the company's Future profitability is being affected by the money that they borrowed that has gone through the company to the shareholders and the CEOs Is that right? Absolutely. I don't know. I should say that it's not every single company that's done this and there are there obviously are lots of companies on that list that are desperately in need and You know irrelevant of kind of other considerations You know these these these companies represent tens of thousands of jobs And we absolutely should be intervening to help save those jobs But that it really shouldn't look like just giving a blank check to the people at the top that have continually You know fostered this environment that means that they Prosper while everybody else is suffering. You've seen that in the last 10 years since the financial crisis and unfortunately It looks like it's just repeating itself again Yes, and that's precisely I mean, I'm no seer and I'm not a brain of Any description, but I I knew exactly what was going to happen when the government started throwing money around that That's where it would end up Ben good to talk to you. Thanks for that. Let's Ben smoke contributing editor at Huck magazine and the journalist behind an investigative report for vice news which you can read on their website and That's what we're talking about this evening. Oh Yes, we're talking about the amount of money of yours that has been created out of nothing and has been given to companies and it's Sluiced straight through those companies into the bank accounts of the super rich Which will significantly influence the future profitability of those companies, but who cares because the rich got richer and All the while of course this was given with the with the publicly stated intention of protecting jobs And it doesn't appear to have done that This is a story in vice news The author I spoke to in the last hour Companies bailed out with public money have paid shareholders billions not millions billions of pounds of your money in dividends While cutting tens of thousands of jobs in the uk at the same time On the 17th march chancellor rishi sunak announced the launch of the co vid corporate financing facility A scheme to support large firms that make quotes a material contribution to the uk economy Vice news found that 30 of the companies currently accessing emergency funds through this facility have paid out an estimated total of 11.5 billion pounds in dividends to shareholders and investors In total 26 companies receiving financial assistance through this scheme of cut jobs Or announced plans to make layoffs Totally at least 42,000 uk jobs. So if the intention was to keep jobs, it's failed Of the companies issuing dividends during this period three have also announced the redundancies are totaling around 6000 jobs This scheme is only open to large companies that were in what they call decent financial health before the outbreak of the pandemic, but excuse me But as I mentioned to ben before the author of this report Enormous companies look like they are on sound financial footing until they aren't And we all know about rbs and northern rock and nron and bear sturns and all of those corporations All of these loans come with interest rates of between 0.2 and 0.6 Which is not available to you. It's not available to smaller businesses They may be able to go through a commercial bank and borrow at interest rates of up to 6 percent Of course, if you are running a small business, you may be keeping it going by using your credit card Which means that you'll be paying an interest rate of 30 percent It'll be cheaper to borrow it off the mafia Author and economist grace blakely told vice news the government's handed a huge blank check to private businesses While everyone else struggles with the deepest economic crisis on record The fact that these companies have used that cash to pay dividends Rather than support workers or undertake investment is unconscionable This is corporate welfare plain and simple Meanwhile, the real welfare system is straining under the huge pressures of mass unemployment And we ain't seen nothing yet. It's true, isn't it that right-wing governments hate the concept of socialism? They don't want to give money to the poor because they are feckless And they will spend it on comics and sweets and lie about drinking stellar and watching tv all day. They think But when it comes to handing out free money to corporations Well, that type of socialism is just a financial privacy On May the 19th, the Bank of England announced any company wishing to withdraw rather from this scheme With the term going beyond the 21st of May next year must sign a letter Committing to restraint where paying dividends and executive pay were concerned What does that mean? What does that mean? That's a PR exercise if ever I saw one I mean, what was restraint to you is probably not what restraint means to them Restraint to them might mean they forego a half of their 10 million pound bonus. I mean, that's That may seem like the very embodiment of restraint to them But it looks pretty generous to us And as I say, many of these aren't even British companies for crying out loud These are companies that earn billions and billions and billions of pounds And I'm sure are very aggressive when it comes to paying their attacks employ vast buildings Of accountants in order to minimize their tax tax to make their accounts as efficient as possible And yet we've decided Well, it's it has been decided on our behalf that these are Companies that should be in receipt of what essentially looks like free money It looks like free money to the recipients the companies themselves have to pay it back But that will come out of their future profits The money Has gone straight into the accounts of the shareholders and the ceo's in the form of bonuses It's increased the price the value of the shares which will kick off bonuses of ceo's I bet share buybacks will be the next to scandal because it was the last time around Why wouldn't it be why wouldn't we Fall into the same quotes mistake again with it looks like a mistake from our eyes, but it looks like More like intention when you think about it If they keep doing the same thing over and over again and the government keeps facilitating that well It's not a mistake. Is it? Potter's bar. Hello, Joan Oh, hello, Nick. I was crying at the beginning of the hour because of the Common sense you were talking you old commie What I want to raise is the mummy that should have gone to the people who are working at home