Why did overseas firms like Chanel get Bank of England coronavirus loans?
In the bag: Luxury fashion firm Chanel was one foreign firm to benefit
The mammoth Bank of England loan scheme was drawn up in the heat of the Covid-19 crisis – to help large firms that make a ‘material contribution’ to the UK economy.
However, that included healthy foreign companies – the likes of luxury firm Chanel, which moved its headquarters to London two years ago, as well as German and American chemical, oil and drug firms.
Eyebrows were raised when overseas conglomerates applied for money, despite paying out very large dividends.
Campaigner TaxWatch reckoned about a third of those on the original list had links to tax havens.
The attraction was quick access to large amounts of cash at interest rates that could be lower than 0.5 per cent.
But it was aimed at averting disaster for thousands of small firms counting on the giants not tightening their belts.
The Treasury and Bank of England said at the time that the scheme would help big firms to ‘pay wages and suppliers, even while experiencing severe disruption to cashflows’.