The Builders Merchants Federation (BMF) has called on the Government to extend the Trade Credit Insurance re-insurance scheme, introduced to support trading following the inital COVID-19 lockdown.

CEO of the BMF John Newcomb

The scheme is scheduled to finish at the end of December 2020 but the BMF has requested a six-month extension, to run up to June 30, 2021.

It reports over 50% of BMF members use some sort of Trade Credit insurance to transact with both customers and suppliers.

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The Government re-insurance scheme – which provided a £10billion guarantee – has helped merchants to access the appropriate level of Trade Credit Insurance to operate their businesses.

It was introduced in May 2020 and was backdated to April 1, 2020

BMF CEO John Newcomb, who chairs the Construction Leadership Council’s insurance working group has written to the Department of Business, Energy & Industrial Strategy (BEIS) formally requesting an extension.

John Newcomb said: “Trade Credit Insurance is a vitally important part of the construction industry, which ensures the smooth flow of goods and materials throughout the supply chain.

“We were extremely pleased that the Government supported it in May. However, we are now experiencing a series of local lockdowns leading to continued uncertainty for the whole construction industry.

“In a survey of companies across the construction industry – many of whom are involved in building materials manufacture and supply – over 54% of respondents believed that without Government intervention insurers are unlikely to maintain an appropriate level of cover for their business when the current re-insurance scheme ends.

“An extension to the current scheme beyond the December 31 deadline will support the industry with business confidence and help it through the continued uncertainity of trading throughout the pandemic.”

The BMF expects to hear the Government’s decision on extending the Trade Credit Insurance re-insurance scheme by mid-November.

Secretary of State Rt Hon Alok Sharma MP thanked merchants for their contribution during the COVID-19 lockdown.