The Tories have slammed Labour’s “outrageous” decision to use taxpayer money to finance a factory in Europe which could jeopardise UK glass production. The Government is giving a £100.5million loan to a British supplier to finance a new glass factory in Belgium, which will be able to import to the UK.

There are concerns from the industry that the move will allow a major competitor to set up production and “hurt” British glass factories. Andrew Griffith, Shadow Business and Trade Secretary, said: “It’s outrageous that taxpayers’ money is financing a factory in another country, owned by a foreign firm. Our Government’s focus should be on supporting domestic businesses that are already feeling the strain of their endless tax rises and red tape. Only the Conservatives will give businesses the climate they need to deliver a stronger economy.”

The company who owns the Belgium factory is a Turkish firm called Ciner Group, whose owner has been embroiled in a fraud probe.

On the Government’s web page for UK Export Finance, it said: “The key aim of the project is to produce container glass (bottles) for the Belgian, Dutch and German markets, as well as for possible neighbouring countries.”

The firm has planned to invest in a glass factory in Wales but now intends to flood the UK with cheap glass made in the EU, sources have said.

A senior glass industry source said: “This lacks all common sense. The Government is hiking taxes on British glass at the same time as helping foreign competitors. It’s a joke.

“Why aren’t ministers putting British jobs first by supporting factories at home? This deal is short-termism that will come back to bite us hard.

“Instead of helping them set up a glass factory in Wales, the government is helping them do it in Europe.”

Plans to open the glass factory in the UK, with the potential to create 650 jobs, was scrapped in July.

Ciner Glass announced it would open the factory on the Rassau Industrial Estate in Ebbw Vale, Blaenau Gwent, in July 2021.

But it later said it would not proceed with plans for a glass bottling facility, but was seeking alternative investment projects for the site.

The company said at the time it remained fully committed to making long-term investments in the UK and south Wales.

It comes as retailers begin paying a tax, known as the extended producer responsibility (EPR) scheme, from this month.

Consumers will be forced to pay more at supermarkets because of the multi-billion-pound recycling tax, retail bosses have warned.

Any company that produces packaging bought and disposed of by households will have to pay the levy.

A UK Export Finance spokesman said: “UKEF’s support ensures UK firms thrive globally, all at no net cost to the taxpayer.

“This specific loan guarantee was provided to finance a large export contract for a British company, and we have robust due diligence on all projects, including strictly applying OECD anti-bribery and corruption standards before any finance support is provided.

“We expect around 16 UK firms to benefit on the back of this contract, creating new jobs for British workers.”

The Government is also aware of reports concerning the arrest of Ciner Glass Limited’s chief executive, which happened after the contract was awarded.