Too little, too late Budget scheme leaves uneven playing field

The British Retail Consortium and Focus DIY’s boss Bill Grimsey have criticised the government’s £5bn credit insurance scheme as “too little, too late”, newspapers report.

Jane Milne, BRC business director, said: “A top-up scheme is much needed but this is too little, too late.”

She added: “Matching the trade credit insurance that private insurers are willing to provide is vital to helping fundamentally sound businesses weather the recession. This safety net will be denied to companies whose cover was cut before April 1, meaning the plight of many is being ignored.”

Bill Grimsey, chief executive of Focus DIY said the scheme did nothing to help those companies that had had their credit insurance withdrawn altogether.

“Darling has missed an opportunity to establish real help for UK companies supplying UK companies,” he said.

“That has now left us and many other companies out in the cold, and created an uneven playing field with competitors who have had their cover reduced.”

The FT said one executive at a company that supplies retailers questioned whether the scheme would provide enough cover in the build-up to the peak Christmas season, when there was a spike in the volume of goods ordered.

Change future credit insurance

The FT, in a separate piece, said: “If a lot of customers want an insurance product that guarantees cover, insurers will have to change the core of what they offer. But suppliers will have to do their bit, too. If they want credit limits that can't be withdrawn or reduced quickly, they will have to bear a greater share of the risks currently shouldered by insurers.”