Budget 2009: business support – credit backing for businesses

Responding to concerns that smaller firms are struggling with problems of credit risk, the government is setting up a trade credit insurance scheme.

The scheme will support businesses that are finding it difficult to get the necessary credit insurance to safeguard them against the risks of not being paid or if a business partner goes under.

Under the scheme, the government will offer to top up private sector trade credit insurance provision if insurers reduce their cover for any business operating in the UK. The guarantee will be available to the 14,000 firms that already use credit insurance.

To help the car industry, a scrappage scheme will be introduced next month giving drivers a £2,000 discount on new vehicles if they trade in cars that are more than 10 years old. The scheme will run until March 2010.

The Chancellor also said that he was unveiling the world’s first carbon budgets, requiring a 34 per cent cut in UK emissions by 2020.

A new £750 million Strategic Investment Fund is to help emerging technologies and advanced industrial projects of importance to the economy. A third of the money will be set aside for low carbon projects.

There will be an additional £525 million for wind power projects, and Mr Darling also promised £405 million to promote low-carbon energy and advanced green manufacturing, and to encourage investment in small-scale, technologically innovative projects.