Chancellor Alistair Darling is expected to announce a government scheme to underpin credit insurance for UK suppliers in next week’s Budget, according to reports.
The Financial Times reported that the scheme would target medium-risk businesses and that it was likely to offer guarantees for companies that have seen cover reduced but not withdrawn. The newspaper said that the value of the scheme had not yet been finalised by the Treasury but cited insiders as saying it could fall short of the £5 billion cap the industry hopes for.
The British Clothing Industry Association is among the trade bodies that have been battling to get government support for fashion suppliers who have had their credit insurance pulled or reduced. Drapers has supported the BCIA campaign, which was launched by chairman Peter Lucas earlier this year. It culiminated in Lucas sending a letter to Lord Peter Mandelson, secretary of state for business enterprise and regulatory reform, earlier this month. A dossier of evidence that the fashion industry was suffering job losses and financial difficulties as a direct result of the credit insurance crisis was also sent to Mandelson.
Mandelson has been in talked with the credit insurers for months over how to help medium-sized businesses cope with the recession.
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