Companies receiving coronavirus bailouts with public money have paid their shareholders billions of pounds in dividends, despite cutting tens of thousands of British jobs.
A recent TLE investigation revealed that almost a third of companies to receive bailouts from the Bank of England are based in a tax haven or owned by someone living there.
Analysis found that nearly £5 billion in public 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 (CCFF).
43,000 jobs cut
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 those firms, at least eight companies paid out dividends after receiving government money. Three more accessed government funds shortly before a payout, and ten companies paid out dividends and later claimed 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 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.”