Business leader says public sector must replace insurers
Confederation of British Industry director-general Richard Lambert has, in today’s Times, called on the government to act as credit insurer for companies unable to buy credit insurance commercially.
In an article headlined: Politicians must act quickly to support enterprise, the UK’s most senior industry leaders says: “Another urgent claim for support from the public balance sheet arises from the growing difficulties now being experienced by many companies - especially small and medium-sized enterprises - in securing the trade credit insurance cover they need to go about their business. There is a strong case for the public sector to stand in as insurer of last resort, offering cover at commercial rates and subject to the normal prudential risks.”
His comments add to concerns raised on 2 January over the lack of bank loans available – an issue raised by the Chancellor Alistair Darling and particularly affecting the motor industry.
Then, Lambert said: “The Government is going to have to do more to restore credit flows across the economy. Nowhere is this more urgent than in the UK's highly efficient automotive industry, which is now suffering serious collateral damage from the banking crisis. This is not a call for a blanket bail-out for the industry. But without access to credit or loan guarantees on commercial terms, this vital part of the economy will incur lasting damage.”
