Retailer slams government credit insurance plan
A leading retailer has warned that government plans to provide credit insurance will fail to help the businesses that need it most.
Focus DIY boss Bill Grimsey said Alistair Darling’s credit insurance top-up scheme will not help the retailers that are struggling most, because it does not provide insurance to firms that have had cover withdrawn.
Writing to several newspapers, Grimsey said the scheme would have “no real impact where it is needed most, and a marginal impact elsewhere.”
“The proposed scheme appears to allow the government to top up credit insurance where it has been reduced but not where it has been fully withdrawn, as it has been with us,” Grimsey wrote.
“This will leave many firms, including ourselves, in the cold but will provide top up for the players perceived to be stronger who have some insurance cover in place.
“This widens the gap and increases pressure on suppliers who, for us, have been very supportive partners.”
The British Retail Consortium, however, welcomed Darling’s proposals as vital for the survival of many high street companies.
“We didn’t want the Government to take on unnecessary risks,” said BRC spokesperson Krishan Rama.
“If the private sector didn’t want to provide insurance, we didn’t want the Government to take on that risk.
“We were asking for the Government to match what the private sector was willing to provide, so this is a welcome move.”
Credit insurance claims increased 51% in the last quarter of 2008 during a wave of high profile bankruptcies, including Woolworths and MFI.
Category: Companies News, Insurance News
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