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Mon 6th Jul 2020 - Update: Treasury reviews access to coronavirus business loans, Scottish hospitality reopens outdoors
Treasury reviews access to coronavirus business loans after EU relaxes rules: The Treasury is considering ways of making it easier for businesses to access coronavirus support loans – ahead of expected measures from the chancellor designed to create “jobs, jobs, jobs” in an effort to kick-start the economy. Officials from the Treasury and the British Business Bank are reviewing access to state-backed loan schemes after the European Commission last week relaxed state aid rules that blocked lifelines for some UK firms. A Treasury spokesman confirmed to The Telegraph it was “considering the implications of this amendment for the loan schemes” and the change by the European Commission was “an important step in ensuring all viable businesses receive the help they need”. Treasury sources said it was likely UK firms rejected for emergency help under the EU’s financial difficulty tests could reapply if the loan schemes were altered. The UK was forced to adopt so-called “financial difficulty” tests under EU state aid rules, which blocked access to the loans by otherwise solid businesses, such as startups, which were loss-making because they have invested heavily for growth, or have complex structures. The European Commission last week published the amendment to the so-called “temporary framework” for all small and micro companies, opening the door to changes to the UK’s loan guarantee schemes. The potential lifeline comes ahead of an emergency statement by chancellor Rishi Sunak on Wednesday (8 July) as the government attempts to pull the economy back from its steep decline due to the lock-down. Firms will also be given financial help to create more jobs, according to reports in The Sunday Times, which said a cash incentive of up to £3,000 per apprentice is one measure being discussed. Sunak has played down the prospect of VAT cuts, but he could provide targeted rate cuts for the hospitality industry. He is also expected to extend business rates relief and VAT deadlines. Sunak is also reportedly exploring plans to hand out “consumption vouchers”. Under the discussions reported by The Guardian on Sunday (5 July), £500 vouchers could be given to adults and £250 to children, to spend in restaurants, high street shops, and other businesses hard hit by the pandemic. 

Scotland reopens beer gardens, allows al fresco dining: Pub beer gardens can reopen in Scotland from today (Monday, 6 July) and outdoor dining is also allowed. But customers are being warned al fresco eating and drinking will not be the same as it was before the lock-down. As well as following strict distancing and hygiene rules, they will have to leave their contact details so they can be traced in the event of an outbreak. Pubs and restaurants should be able to welcome customers indoors from 15 July. That will be part of phase three of the Scottish government’s route map out of lock-down, which first minister Nicola Sturgeon is expected to confirm on Thursday (9 July). Meanwhile planning regulations are being temporarily relaxed to allow pubs, restaurants and cafes to use areas such as public footpaths for seating and structures like open-sided gazebos. Kevin Stewart, the planning minister, said the government wanted to ensure the industry could comply with distancing measures and provide a safe and pleasant environment for customers.

Music venues to benefit as government unveils £1.57bn support for culture: The government has unveiled a £1.57bn support package to help protect the futures of UK music venues, independent cinemas, theatres, galleries, museums and other cultural venues. It follows several weeks of pressure, with industry leaders warning many venues were on the brink of collapse. Guidance for a phased return of the performing arts is expected to be published by the government shortly. The £1.15bn support pot for cultural organisations in England is made up of £880m in grants and £270m of repayable loans. The government said the loans would be “issued on generous terms”. Funding will also go to the devolved administrations – £33m to Northern Ireland, £97m to Scotland and £59m to Wales. A further £100m will be earmarked for national cultural institutions in England and the English Heritage Trust. There will also be £120m to restart construction on cultural infrastructure and for heritage construction projects in England that were paused due to the pandemic. The government said decisions on who will get the funding would be made “alongside expert independent figures from the sector”. Night Time Industries Association chief executive Michael Kill said: “This is an unprecedented commitment from the government and long-awaited financial support that reflects the importance of the sector to the UK and internationally. We will await further details of the announcement in the coming days to gain a greater understanding of the businesses that will benefit from this investment. We hope it will also include the vital supply chain businesses which are fundamental to the creative and cultural sector, of which the night-time economy businesses are very much a big part of. We also look forward to receiving updated guidance with regard to the phased return of the night-time economy sectors.”

Cineworld intends to launch counter claim after Cineplex initiates legal proceedings following deal collapse: Cineworld has said it intends to launch counter-claims against Cineplex after the Canadian operator initiated legal proceedings following Cineworld’s decision to terminate a proposed C$2.8bn acquisition of the North America group. Cineworld stated: “The proceedings allege Cineworld breached its obligations under the arrangement agreement and/or duty of good faith and honest contractual performance and claim damages of up to C$2.18bn less the value of Cineplex shares retained by Cineplex shareholders. As previously announced, Cineworld did not breach these (or any) obligations or duties and will vigorously defend this claim. In any event, Cineworld believes Cineplex’s claim, if successful, would be limited to its costs and expenses incurred in relation to the acquisition and would not be assessed by reference to the consideration that was payable under the acquisition. Cineworld terminated the arrangement agreement because Cineplex breached a number of its covenants under the arrangement agreement. Cineplex did not remedy these breaches when given the opportunity to do so. Cineworld is entitled to recover from Cineplex all damages and losses that it has suffered as a result of Cineplex’s breaches and the acquisition not proceeding, including its financing costs, advisory fees and other costs incurred. Cineworld intends to counter-claim against Cineplex for these damages and losses.”

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