Chancellor Rishi Sunak has warned that there will be more tough times to come amid the coronavirus pandemic.

Providing MPs with an update on the economy, Mr Sunak said: "We should be in no doubt about the seriousness of the economic situation.

"The Office for Budget Responsibility have published a scenario showing that the coronavirus will have very significant impacts both at home and in the global economy.

"More than 1.5 million new claims have been made to Universal Credit, over four million jobs have now been furloughed and survey evidence suggests a quarter of businesses have stopped trading.

"These are already tough times and there will be more to come."

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Mr Sunak announced a new "micro loans scheme" to help small businesses.

He told MPs he knew some firms were struggling to access credit, adding: "If we want to benefit from their dynamism and entrepreneurial spirit as we recover our economy, they will need extra support to get through this crisis.

"Some businesses will not want to take on more debt, which is why our focus has been on cash grants, tax cuts and tax deferrals - but for others loans will be part of the answer.

"So, today, we're announcing a new micro loans scheme providing a simple, quick, easy solution for those in need of smaller loans.

"Businesses will be able to apply for these new bounceback loans for 25% of their turnover, up to a maximum of £50,000, with the Government paying the interest for the first 12 months."

 

 

The Chancellor said: "We are also providing extensive support for people's jobs and incomes.

"Our most important and far-reaching policy is the coronavirus jobs retention scheme to keep people in employment.

"The scheme launched, on schedule, last week and I am pleased to report that the first grants have just been paid.

"Around half a million employers have already applied for help to pay the wages of over four million furloughed jobs.
"Jobs that might otherwise have been lost."

Mr Sunak said the loans will be available from 9am next Monday following talks with banks, adding: "There will be no forward-looking test of business viability, no complex eligibility criteria, just a simple, quick, standard form for businesses to fill in.

"For most firms, loans should arrive within 24 hours of approval and I've decided for this specific scheme that the Government will support lending by guaranteeing to the lender 100% of the loan."

Mr Sunak said the Government is not prepared to underwrite 100% of loans as it needs to balance the risk to the taxpayer with the needs of small businesses.

He said: "I've heard some calls for the Government to underwrite all our loan schemes with 100% guarantees. I remain unconvinced by the case for doing that universally.

"We should not ask the ordinary taxpayers of today and tomorrow to bear the entire risk of lending almost unlimited sums to businesses who may, in some cases, have very little prospect of paying those loans back and not necessarily because of the impact of the coronavirus.

"So, I do not think it is appropriate to provide 100% guarantees on all of our schemes.

"Instead, these new bounceback loans carefully target that extraordinary level of state support at those who need it most.

"The £50,000 cap balances the risk to the taxpayer with the need to support our smallest businesses."

The Herald:

Swedish state-owned energy company Vattenfall will build a £320 million wind farm in Scotland after a deal with infrastructure fund Greencoat, the two firms said.

The South Kyle site, which is halfway between Glasgow and Dumfries, will supply enough electricity for around 170,000 homes when it opens in the first quarter of 2023.

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Vattenfall will install 50 turbines and supply 235 megawatts (MW) of power to the grid. It already has permission.

Vattenfall's head of wind Gunnar Groebler said: "South Kyle will significantly contribute to the renewable energy production in Scotland."

The new wind farm will pump around £38 million into local schemes through its community benefit programme over its lifetime, bosses said.

Vattenfall chief executive Magnus Hall said: "The planned construction of the South Kyle Wind Farm shows our commitment to the United Kingdom and its transition to climate neutrality, as well as delivering on Vattenfall's goal to enable fossil-free living within one generation."

However, construction at the site may have to wait until there is more clarity on the coronavirus lockdown, bosses said.
"Construction of the wind farm will begin once it is appropriate to do so. Therefore, a timeline for construction is yet to be confirmed," Vattenfall said.

The new buy adds to Greencoat's portfolio of 36 operating wind farms across the UK, with almost one gigawatt of generating capacity.

Laurence Fumagalli, of Greencoat Capital, said: "We are pleased with the transaction, which will bring a large-scale, subsidy-free wind farm under our ownership."

Greencoat will pay Vattenfall £320 million to build the site, and run it for a decade.

"We are delighted to enter into an agreement with Vattenfall, our fifth major utility partner," said Greencoat's Tim Ingram.

One of the world's largest tobacco companies is quitting its premium cigars business in two deals worth £1.1 billion, but it will continue to pump out mass-produced cigars.

Imperial Brands said it would sell its US premium cigar business to Gemstone Investment for €185 million (£161 million), while Allied Cigar Corporation will pay €1.04 billion (£912 million) for the premium business in the rest of the world.

It marks the end of a 12-year foray into the premium cigar world after the company's 2008 mega-deal for Altadis.

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Imperial Tobacco, as the business was known then, paid 16.2 billion euros (£11 billion at the time) for the Spanish smoking giant.

The premium cigars business, which includes half of a Cuban factory, was part of the deal.

It will now fetch Imperial Brands net cash proceeds of £958 million, which the company will use to pay down debt.

"We are delighted to be able to announce the sale of Premium Cigars in the current challenging global environment," read a statement from joint interim chief executives Dominic Brisby and Joerg Biebernick.

"It has been a complex transaction involving joint venture partners and assets across multiple geographies and we would like to thank everyone involved for working so hard to get the deal agreed."

The deals are expected to close in the third quarter of this year.