Project Merlin

Claire Jones

By Claire Jones and Norma Cohen

The final batch of data for Project Merlin, the government’s flagship agreement with Britain’s biggest banks to encourage business lending and appease public anger over the financial crisis, show the banks missed their target for lending to small and medium-sized companies.

The data, out today, revealed lending to SMEs for 2011 fell just over a billion short of the £76bn target set by Project Merlin, which the government will not renew this year.

That the government’s target was not met is disappointing. But a shortfall of less than 2 per cent is hardly disastrous.

However, Bank of England data suggest lending conditions for SMEs are far worse than the Merlin data show. Both in terms of the supply of credit and the cost of borrowing.  

Claire Jones

It seems the chancellor doesn’t listen to the governor of the Bank of England.

George Osborne said last night that Project Merlin, the government’s flagship agreement to appease public anger over the banking crisis, was “already delivering more lending to SMEs”.

Not according to Sir Mervyn.