Tories slam government dithering on credit

By Hayley Brown

- Last updated on GMT

Related tags: Credit insurance, Economics, David cameron, Conservative party

Tories slam government dithering on credit
“Dithering and paralysis in government” on issues such as credit insurance and credit availability are costing people their jobs and businesses,...

“Dithering and paralysis in government” on issues such as credit insurance and credit availability are costing people their jobs and businesses, the Conservative Party has warned.

The government has come under fire because the Department of Business Enterprise and Regulatory Reform said in January that it was preparing to unveil a package to help companies affected by credit insurance. However, the package has yet to surface, which the Tories said was a “scandal of inaction”

“Ministers don’t appear to know the difference between a newspaper headline and actually delivering real help on the ground. This dithering and paralysis in government is costing people their jobs and their businesses,” said George Osborne, shadow chancellor.
The Tories’ criticism comes after the Food and Drink Federation recently wrote​ to the government to urge it to take swift action on the issue of credit insurance, as it was hindering competition in the industry. The letter asked the government to “end the media speculation and give some clarity for food and drink manufacturers about your plans as soon as possible”
To make matters worse, said the Tories, schemes to boost credit in the sector have yet to emerge. Osborne said: “It distresses me that the credit scheme the government eventually promised to set up, and which was supposed to start this week, is still on the drawing board.”

The Confederation of British Industry’s (CBI) Access to Credit Survey, published last week, found that 43% of firms use credit insurance to cover the supply of goods, and 67% of these said its availability has worsened in the last three months, which is “hindering their ability to secure contracts and supply customers”
“Significant government measures aimed at restoring credit flows are gradually being put into place, but the pace of delivery is slow,” said Ian McCafferty, the CBI’s chief economic adviser.
The survey also found that in the last three months, 74% of businesses have seen a deterioration in their credit limit insured, 48% said that they were experiencing a more complex renewal and 52% said that they were paying a higher cost for cover.

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