Airlines provided £ 1.8bn in emergency coronavirus loans

The Bank of England has loaned nearly £ 2bn to some of the UK’s largest airlines and paid £ 1bn to a German chemical giant as part of its emergency financing for a pandemic, it has been revealed.

Ryanair and easyJet have won loans of £ 600 million each, with Aer Lingus and BA owner IAG and Wizz Air both agreeing to £ 300 million, raising concerns from environmental activists who want the loans to come with strings attached. .

The central bank revealed that 53 companies had borrowed a total of £ 16.25bn under the scheme, as it released a full list of all borrowers on Thursday.

Other household names include Asos, Nissan, John Lewis, G4S, and Tottenham Hotspur.

The North London football club is the only team using the loan scheme and the move follows criticism earlier this year when bosses initially said they would use the government’s licensing scheme for non-playing staff.

The High Pay Center’s analysis shows that the CEOs of the 13 listed companies FTSE 100 and FTSE 250 received a combined £ 36 million in total last year, an average of £ 2.8 million.

Rolls-Royce was revealed to have obtained a £ 300 million loan from the bank just a month after the engine maker said it was cutting at least 9,000 jobs.

Its annual report shows that CEO Warren East received £ 3.2 million in total pay last year, including £ 2 million in annual bonuses and long-term incentive plan stocks.

It raised questions from activists about which companies authorities should support and what they should expect in return.

“Many of these companies have a poor track record in terms of excessive executive salaries at the top, poverty wages for their overall workforce, and unsustainable environmental practices,” said Luke Hildyard at the High Pay Center.

He added: “It makes no sense for public bodies to support companies without ensuring the commitment to act in the public interest. If we want to rebuild better, with a more resilient economic model, a more united society and a more sustainable approach to the environment.” . then government bailouts and loans need to be implemented more carefully. “

The largest individual loan, £ 1 billion, has been to the German company BASF, the world’s largest producer of chemicals.

The chief executive of Rentokill, whose company borrowed £ 600 million from the scheme, received £ 4.6 million in full payment last year. This included a £ 3.6 million annual bonus and a stock incentive.

The list also includes defense company Chemring and paint giant Akzo Nobel.

On Wednesday, the environmental group ClientEarth asked the government not to back loans to companies without setting emission criteria.

Greenpeace climate activist Fiona Nicholls said: “Airlines have been given exactly what the chancellor, prime minister, economists and the public said they shouldn’t get: billions in cheap and easy loans for them to get. continue polluting, without any commitment to reduce their emissions. ” or even keep your workers on payroll.

“Today we learn that cruise lines, pesticide companies and auto companies have received similar generosity. We should see a lot more public benefits from all this public money.”

ClientEarth CEO James Thornton said: “It appears that the peak of the virus has passed for now, but we simply cannot suspend our response to climate change as we deal with the pandemic.

“On the contrary, the recovery enables the Government to jump-start the UK economy in a way that ensures long-term resilience and a fairer and more equitable transition to a net zero economy.”

The Bank of England’s Covid Corporate Finance Facility (CCFF) was established to help larger companies with credit scores during the pandemic.

It complements three other loan support schemes, in which loans are made by street lenders and guaranteed by the government.

Even before the list was published, Dame Margaret Hodge, a Labor MP and former chair of the Public Accounts Committee, had asked the government to release even more data on other loan schemes.

He also said that the government should not make loans to companies that may not be paying their fair share of taxes.

“While for many these schemes will be a financial lifeline, for unscrupulous corporations they will be seen as easy prey,” he wrote in a letter to Foreign Minister Rishi Sunak.

The Bank of England has pledged nearly £ 2bn in coronavirus funding to some of the UK’s largest airlines, while providing a loan of up to £ 1bn to a German chemical giant, it was revealed on Thursday.

Ryanair, British Airways, Wizz Air and easyJet received hundreds of millions of pounds as they were forced to ground most of their planes during the pandemic.

Ryanair and easyJet have taken out loans of 600 million pounds each, with Aer Lingus and the owner of BA, IAG and Wizz Air, both accessing 300 million pounds.

The Bank of England said it had promised 53 companies that they could borrow under its coronavirus loan scheme, as it released a full list of all borrowers on Thursday.

The list, which includes the defense company Chemring and the paint giant Akzo Nobel, is likely to provoke protests from some groups.

The largest individual loan, £ 1 billion, has been to the German company BASF, the world’s largest producer of chemicals.

On Wednesday, the environmental group ClientEarth asked the government not to back loans to companies without setting emission criteria.

ClientEarth CEO James Thornton said: “It appears that the peak of the virus has passed for now, but we simply cannot suspend our response to climate change as we deal with the pandemic.

“On the contrary, the recovery enables the Government to jump-start the UK economy in a way that ensures long-term resilience and a fairer and more equitable transition to a net zero economy.”

The Bank of England’s Covid Corporate Finance Facility (CCFF) was established to help larger companies with credit scores during the pandemic.

It complements three other loan support schemes, in which loans are made by street lenders and guaranteed by the government.

Even before the list was published, Dame Margaret Hodge, a Labor MP and former chair of the Public Accounts Committee, had asked the government to release even more data on other loan schemes.

He also said that the government should not make loans to companies that may not be paying their fair share of taxes.

“While for many these schemes will be a financial lifeline, for unscrupulous corporations they will be seen as easy prey,” he wrote in a letter to Foreign Minister Rishi Sunak.

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