Government top up scheme must be backdated

Confederation of British Industry (CBI) deputy director-general John Cridland has called for the £5bn government-backed credit insurance top up scheme to be broadened, the FT reports.

“We’re saying to the government this is a step in the right direction but it does not go far enough. We’d like them to have another go at it,” he said.

The FT says the £5bn mentioned by the government was the total it was prepared to pay not an estimate of demand.

“If you were to suppose that it would be difficult for the amount of extra cover being provided in the scheme to reach £5bn, I don’t think you’d be wrong,” said Fabrice Desnos, chief executive of Euler Hermes UK, the biggest of the three credit insurers participating in the top-up programme.

The Department for Business, Enterprise and Regulatory Reform (BERR) said: “We cannot forecast the level of likely demand [for the scheme] given the many variables that will affect it.”

The department said it was up to the scheme’s three insurers, Euler, Atradius and Coface, to estimate how many companies could take part. While Euler estimates no more than 3,000 will apply, Coface says 500 of its customers might receive top-ups. Atradius thinks those eligible will be “very few” because of the restrictions.

Top-ups will be available only to companies that have had credit limits for specific customers reduced since 1 April. “Backdating the programme further would have been a lot more helpful,” Cridland said.