Thousands of construction jobs protected after trade credit guarantee announced
A leading construction trade body says thousands of jobs have been protected after the Government pledged to protect Trade Credit Insurance.
The Builders Merchants Federation (BMF) says the decision by Government announced today (13 May) to guarantee business-to-business transactions will ensure confidence in the construction industry supply chain.
Construction is one of the largest users of Trade Credit Insurance, accounting for some 30 per cent of users.
Many builders’ merchants across BMF membership – made up of 710 members across the UK and Ireland, with combined sales of £32 billion – have it in place.
John Newcomb, CEO, BMF
John Newcomb, BMF CEO, said:
“We are extremely pleased that the Government will provide this vital backstop for the construction industry.
“Thousands of jobs will be protected, and cash will be kept flowing, enabling the building materials supply chain to trade with confidence.
“The announcement is particularly welcome on the day that the construction industry is among those being encouraged to return to work in a safe and structured way.”
The Trade Credit Insurance guarantee will be delivered through a temporary reinsurance agreement with insurers currently operating in the market.
It is designed to cover Covid-19 economic challenges and will provisionally last until the end of the year
Trade Credit Insurance protects suppliers selling goods against the company they are selling to defaulting on payment, giving businesses the confidence to trade with one another.
John Newcomb chairs the Construction Leadership Council Group which has been looking at the issue in the COVID-19 pandemic.
The BMF has also worked closely with the CBI on the matter.
Rain Newton-Smith, CBI Chief Economist, said:
“The Government’s decision to backstop trade credit insurance will protect thousands of jobs and allow many businesses across the UK to restart operations.
“This intervention will keep cash flowing within critical supply chains and more importantly, it will help lower risk for our exporters and ensure that UK firms can continue to trade with other countries.
“Getting this scheme up and running is crucial as the UK economy gradually restarts, while keeping public health as the first priority.”
More details at https://www.gov.uk/government/news/government-to-support-businesses-through-trade-credit-insurance-guarantee.
Kindly shared by Builders Merchants Federation (BMF)
