Back date trade credit insurance says BRC
Boosting some elements of the trade credit insurance top-up scheme is a welcome move, but the scheme needs to be further back dated to make a real difference.Reacting to the further amendments to the Government's trade credit insurance top-up scheme announced yesterday (Thursday), the BRC said the move might assist some of the businesses continuing to suffer as a result of restricted credit. But it remains the case that the Government needs to go further by extending the coverage of the scheme to back to 1 April 2008, when insurers began removing cover as the downturn began, rather than sticking to the current 1 October cut-off date.
The BRC's latest Quarterly Credit Conditions Monitor found half of large retail respondents believed the reduction or withdrawal of trade credit insurance had adversely affected their businesses.
Tom Ironside, BRC Business Environment Director, said: "The Government's decision to improve some elements of the trade credit insurance top-up scheme may help a few but the changes don't go far enough. To make a real difference the scheme needs to be back dated to last April - when insurers began removing cover as the recession began.
"The reduction or withdrawal of this insurance is having a damaging impact - half of large retailers responding to a BRC survey said their businesses had been harmed by restricted availability.
"Retailers need to have the right stock on their shelves if they're to survive the current tough trading conditions and keep staff in work. This is especially important as we approach the run up to Christmas - traditionally most retailers' busiest trading period.
"The Government should also put more pressure on insurers to ensure more accurate underwriting assessments are being made."
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