Trade body calls on government to protect construction industry lifeline

A leading construction group is calling on the Government to extend a trading initiative it says has helped to protect thousands of jobs in the UK.

According to the Builders Merchants Federation (BMF) confidence in the construction industry supply chain received a significant boost after the Government backstopped Trade Credit Insurance in May, to guarantee business-to-business transactions in the Covid-19 crisis.

Construction is one of the largest users of Trade Credit Insurance, which protects suppliers selling goods against the company they are selling to defaulting on payment.

Since May, the Trade Credit Insurance guarantee has been delivered through a temporary reinsurance agreement with insurers currently operating in the market. It is scheduled to run until the end of 2020.

Now John Newcomb, CEO of the BMF and Chair of the Construction Leadership Council’s Working Group for Trade Credit Insurance, has written to BEIS asking for a six-month extension for the initiative.

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.

“As a result, thousands of jobs have been protected and cash has been able keep flowing, enabling the building materials’ supply chain to trade with confidence.

“Construction will play a vital role in the recovery of the UK economy.

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