The UK government has defended handing billions of pounds in soft loans to multinational companies to help them through the pandemic even though some have subsequently cut thousands of jobs between them across the country.

The opposition Labour party and unions have condemned the behaviour of companies including BASF, the German chemicals group, which closed a UK plant and moved the work to France despite receiving £1bn from the Bank of England’s Covid Corporate Financing Facility — the biggest single company payout.

The facility, established in April, has lent more than £33bn to 232 companies, with 51 still owing a combined £12.5bn.

When some announced they would pay dividends to shareholders after taking the money, the government in May brought in new rules that prevented borrowers from paying dividends or bonuses — but these only applied to companies that took the loans after that date or that had not previously committed to the payouts. Companies need to repay the facility after 12 months.

More than half the current recipients have cut jobs in the UK, including Japanese carmaker Nissan, US cruise company Royal Caribbean Group and Australian engineering company Worley.

BASF in January told Ineos, the chemicals company that operates its HMD (Hexamethylenediamine) facility near Middlesbrough in north-east England that it would close, with the loss of 90 permanent jobs and 300 contractors. It is switching production of the plastics component to France.

Shadow business secretary Ed Miliband condemned the move. “It appears the government has shelled out £1bn in taxpayers’ money with no questions asked. Taxpayers and workers in Teesside will rightly see this as economic negligence on the part of government,” he told the Financial Times.

“Why did the government not get guarantees about employment for such a large sum of support? Did they have any discussions with the company on these issues? The business secretary must explain.

“Labour has said all along that when it comes to these large payouts, we should be supporting business but in return, business has a responsibility to workers and taxpayers.”

BASF, which employs 700 people in the UK, said the plant suspended production last year while it searched for alternative sources of HMD. “We have come to the decision in favour of the alternative supply concepts and therefore propose not to restart the plant.”

It said it would repay the facility loan in March.

Many other companies that have taken money from the scheme have already repaid, or are looking to repay ahead of the maturity in April and May. Any extension or new facility would mean having to restrict their dividend and management payments.

Politicians have criticised the scheme for allowing companies with large overseas owners to hand millions to shareholders and management while benefiting from cheap British Covid-19 loans.

Spain’s Iberdrola, which owns Scottish Power, has paid dividends and tapped the facility for money — as have Japanese carmaker Honda and US energy group Baker Hughes.

Meanwhile, BASF has committed to paying its next dividend in May. Walgreens Boots Alliance has paid dividends throughout the year, most recently last month, after taking a facility loan before the ban was imposed.

Overseas-owned companies also point out that, while UK operations have been badly affected by the pandemic, dividends reflect the global prospects of multinationals with better performing operations elsewhere.

Multinational companies that have already repaid loans include ABB, Johnson Controls, Akzo Nobel, Chemring, Telefónica Europe, Chanel and CNH Industrial.

The Treasury said companies had had to prove they “make a material contribution to the UK economy” to access the scheme.

“It is directly supporting some of the UK’s biggest companies — directly responsible for almost 2.5m jobs in the UK,” it said. “We expect any businesses who have been granted loans to use them in a way which is consistent with that aim.”