Companies that profit from a coronavirus bailout with public cash have paid their shareholders billions in dividends, despite the loss of tens of thousands of British jobs.
A recent TLE survey found that nearly a third of companies that get bailouts from the Bank of England are in a tax haven or own a user who lives there.
The investigation revealed that about five billion pounds in public currencies were handed over to corporations with links to tax havens or were embroiled in a currency controversy: nearly 30% of the coins borrowed under the government’s Covid Corporate Financing Mechanism (CCFF).
Today, VICE News found that 21 of the corporations with emergency funding (about 30%) paid an estimated total of 11.5 billion pounds in dividends to shareholders and investors.
Of these corporations, at least 8 paid dividends after receiving the public budget. Three others had to make a public budget in a time before a payment, and ten corporations paid dividends and then demanded government support.
By contrast, according to VICE, 21 corporations that receive public budgets, the CCFF canceled its dividend bills this year.
A total of 26 corporations receiving CCFF monetary assistance have cut jobs or announced redundancy plans, with only 43,000 jobs in the UK at risk.
The revelations provoke a closer look at how corporations are exploiting government systems opposed to coronaviruses.
Analysis by TaxWatch UK, a think-tank, found that £4.79 billion in bailout cash has been handed to companies with links to tax havens, or that have been embroiled in financial controversy – close to 30 per cent of the money loaned out under the government’s Covid Corporate Financing Facility.
One company – Baker Hughes, a subsidiary of American giant General Electric – was granted a £600 million loan, despite the fact that its parent company has been sued by HMRC over unpaid taxes dating back 16 years.
Luxury fashion brand Chanel – whose ultimate parent company is based in the Cayman Islands – also received £600 million, as did EasyJet – which is part-owned by a trust based in the Caribbean territory.
A further £25 million went to cruise operator Carnival, whose ships were registered in Panama. Dozens of people have died and over 1,500 confirmed cases of Covid-19 have so far been recorded in connection with the company’s cruises, after major outbreaks on ships like the Diamond Princess earlier this year.
Machine manufacturer JCB – whose parent company is located in the Netherlands – received a £600 million bailout. The company donated more than £50,000 to Boris Johnson in 2019 and its chairman, Lord Bamford, contributed a further £20,000 to the prime minister’s leadership campaign.
Critics have lambasted Britain’s reluctance to prevent companies registered offshore from accessing government bailouts, a move taken by a host of other countries – including the devolved administrations in Scotland and Wales.
Dame Margaret Hodge, chair of the All-Party Parliamentary Group on Anti-Corruption and Responsible Tax, told TLE last month: “I am utterly disgusted at the big companies that avoid paying their fair share of tax that have been abusing the Government’s support schemes during the pandemic.
“Saving jobs is of course important. But only businesses that pay into the common pot for the common good should have any right to financial assistance from the taxpayer.”
Related: Almost £5 billion of coronavirus bailouts handed out to firms based in tax havens
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