Brokers to grill Government over £5bn trade credit scheme
Struggling businesses across the country would have been left in despair at the Government’s top-up trade credit scheme. The top-up didn’t include any firm that had their cover pulled before April. Now it’s up to brokers to ask the awkward questions. After all, they have probably lost some serious income from clients who had their cover pulled before Easter.
There are literally hundreds of businesses up and down the country who have had their cover pulled before April 1. Any supplier who has told a bank their business doesn’t have trade credit insurance would almost certainly have had more difficulty raising finance or renegotiating their banking facilities. It means they face going out of business, not a good thing for a trade credit broker, such as Aon, who might have accounts across multiple classes in commercial lines.
However, the Government seems determined not to address the pre-April problem. Business Secretary Peter Mandelson has said the state will not prop up bad businesses or high risks. The scheme costs around £5bn, it seems the government does not want the taxpayer to pay anymore.
For brokers, it seems it’s a case of like it or lump it.
Brokers may have more chance of persuading the Government to extend the scheme to exports, which are large accounts for global brokers such as Aon and Willis.
Susan Ross, director of trade credit at Aon, said last month she hoped the scheme would be extended to exports. The government can expect some lobbying from other brokers.
Finally, brokers will want to know more about the details of the scheme. How exactly will it work? How quickly will the Government respond to claims? Is the scheme going to be extended beyond 2009 if the economy is still in a slum?
The meeting should be an interesting clash of ideas and opinions.