The UK Fashion and Textile Association (UKFT) has joined the British Retail Consortium (BRC) in calling for an extension of the Government’s temporary trade credit insurance top-up scheme, claiming the scheme has been “unsuccessful” so far.
The association is also calling for a broadening of the initiative to include those that have had credit insurance removed altogether.
A UKFT spokesman said: “The scheme as it is doesn’t help suppliers. I don’t know of one that has been supported by it. It needs to be broadened. Most suppliers have had cover pulled completely so how can you top-up something that doesn’t exist?”
The Government’s top-up scheme was launched in the April Budget to shore up retailers and suppliers hit by the reduction of credit insurance cover during the downturn. Retailers including Blacks Leisure and the now-defunct Mosaic Fashions – the former parent company of Oasis and Karen Millen – were severely impacted by the withdrawal of credit insurance. The scheme ends on December 31.
The cut-off date for eligibility for the top-up scheme cover period is October 1, 2008, but the BRC is calling for it to be backdated to April 1, 2008, when insurers started to remove cover.
According to the BRC’s Quarterly Credit Conditions Monitor report published this week, 77% of large businesses and 59% of smaller retail businesses believe the scheme should be extended.
In terms of negative impact, 38% of large retailers and 28% of small and medium-sized retailers said the reduction or withdrawal of credit insurance had hit their businesses over the past year.
Marc Henstridge, head of risk for insurance giant Atradius UK and Republic of Ireland, admitted that the programme had not been as productive as he had hoped but would not comment further.
He said: “It’s not been the success we’d have liked it to have been.”
- 85% of large retailers and 95% of small and medium-sized retailers (SMEs) said the scheme had yet to help
- 38% of large retailers and 28% of SMEs said the reduction or withdrawal of trade credit insurance has hit their businesses
- 77% of large retailers and 59% of SMEs said the scheme should be extended beyond December 31
Source: BRC Quarterly Credit Conditions Monitor Report