Decisions about what companies to bailout should be based on economic imperatives, not morals

The Chancellor certainly has no shortage of demands on what back in the day used to be called “taxpayer’s money”, and these days would be accurately referred to as the Bank of England’s Magic Money Tree. Almost a third of the private sector workforce has already been furloughed. Small businesses are getting guaranteed loans. Money is being shovelled out to start-ups and the self-employed. It isn’t, however, going to stop there.

Over the next few weeks, there will be intense pressure to bail out specific companies that have seen their sales wiped out, usually through direct cash injections in return for equity stakes. In this country, a potential bailout of Sir Richard Branson’s Virgin Atlantic is running into a storm of criticism over his past record and his tax status in particular.

Any company accessing the furlough scheme can expect intense scrutiny of its employment or environmental standards (Sir Philip Green’s decision to furlough staff prompted predictable demands that he sell one of his yachts instead). We have yet to see what the reaction would be if Tim Martin or Mike Ashley were to ask for a handout.

But – and I’m just taking a wild guess here – it probably isn’t going to be good. And yet, in reality, everyone should just grow up. It doesn’t matter what the business is like, or whether we approve of everything it has ever done. Here’s why.

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