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).
Now, VICE News has found that 21 of the companies accessing emergency funding – some 30 per cent – have paid out an estimated total of £11.5 billion 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, VICE reports, 21 companies receiving government funds through the CCFF have cancelled their dividend pay outs this year.
A total of 26 companies receiving financial help through the CCFF have cut jobs or announced plans to make lay-offs, with approaching 43,000 UK jobs at risk.
The revelations pour further scrutiny on the ways in which companies are exploiting the government’s coronavirus support schemes.
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 maker JCB, whose parent company was founded in the Netherlands, won a ransom of six hundred million pounds. The company donated more than 50,000 euros to Boris Johnson in 2019 and its chairman, Lord Bamford, contributed another 20,000 euros to the crusade for the Prime Minister’s leadership.
Critics have criticized Britain’s reluctance to save foreign-registered corporations from government bailouts, a move taken through a number of other countries, adding delegated administrations in Scotland and Wales.
Mrs Margaret Hodge, chairwoman of the all-party parliamentary organization on anti-corruption and guilty taxes, told TLE last month: “I am totally disgusted by the big corporations that avoid paying their fair share of taxes that abuse government aid programs. The pandemic.”
“Saving jobs is, of course, important. But only corporations that pay in the non-unusual pot for non-unusual smarts are entitled to taxpayer monetary assistance.”
Related: Nearly five billion pounds of coronavirus ransom paid to corporations in tax havens
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