Companies who accept taxpayer-funded bailout loans will have to reign in bonuses and dividends.
“Large firms who borrow from the UK taxpayer will be banned from paying bonuses and dividends, according to the Treasury and the Bank of England.
The limit on the Coronavirus Large Business Interruption Loan Scheme has been lifted from £50m to £200m.
Firms who want more than £50m will face restrictions until the loan is repaid.
The Bank of England will implement the restrictions on the scheme it runs as well as seeking a letter from firms who wish to borrow for more than a year.
It said big companies who require loans from the Bank’s Covid Corporate Financing Facility (CCFF) for a term beyond 19 May 2021 ‘will be expected to provide a letter addressed to HM Treasury that commits to showing restraint on the payment of dividends and other capital distributions and on senior pay’.
The Bank said: ‘These commitments are intended to create incentives for, and promote the ability of, businesses to repay their borrowings.'”
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