The £5bn top-up fund announced in last week's Budget is welcome - but more help is needed, says Tarlok Teji

Moves in last week's Budget for a 'top-up' trade credit insurance scheme of up to £5bn are broadly welcome. The reduction in and, in some cases withdrawal of, credit insurance has hurt suppliers and caused uncertainty for retailers. Any move to provide support and boost confidence in the current environment is good news.

But many will feel the measures do not go far enough. Companies whose credit insurance has been withdrawn will not benefit. Nor will those whose trade credit insurance was cut before 1 April.

So what else can be done? The Government may play a role but there are other avenues to explore.

Retail and supplier industry bodies may wish to consider whether there are other ways to protect their members. Could a system of 'self insurance' be established, where retailers and suppliers contribute to an industry fund that can be drawn on in times of need? Of course, those most in need are likely to be those least able to contribute.

There may be a more fundamental issue. Trade credit has been used to protect international trade since after the First World War but was only incorporated into domestic trade agreements much later. In its domestic use, it is a relatively new addition to the supply chain.

With many suppliers experiencing difficulties, the withdrawal of trade credit insurance has led suppliers - and retailers - to manage risk more aggressively and assess the credit-worthiness of businesses they trade with more rigorously. Without insurance, suppliers cannot leverage and take on riskier contracts and may represent a greater risk to some of their retail customers.

Major retailers, multinational suppliers and brand companies do not use trade credit, so that need not always get in the way of commercial negotiations. But for smaller and medium-sized businesses, it is a valuable safety net and may be a necessity since most suppliers' sources of finance - usually banks - expect it.

Collaboration between suppliers and retailers, with more transparency of each other's balance sheets, could help limit its importance.

Tarlok Teji is UK head of retail at the business advisory firm Deloitte.