At least try to get your facts straight

The Bank of England's quarterly report on "Project Merlin", its oddly-named agreement with the main UK banks to try to boost business lending, was released today. (BBC story here.)As the relative paucity of screaming, bank-bashing headlines in the online media would suggest, the four banks involved have largely met the targets they agreed back in February. In fact, lending for the first three quarters of this year was running at a rate about 11% above the target.

But wait! Small businesses are feeling short changed. There's a separate target of £75 billion for new lending to SMEs (small and medium sized enterprises). Hitting that target would imply a three-quarter figure of £56.8 billion, and the actual number in today's report was....£56.1 billion!

Most people would think that marginal shortfall wasn't worth blowing a gasket about, but then most people don't work for small business lobby groups. Let's hear from someone who does, via the BBC website:

John Walker, national chairman of the Federation of Small Businesses, said the banks had "yet again missed the small business target".

He added that the lending targets failed to address the "lack of competition" in the banking sector.

"We need to see a clear change: more competition and new lines of credit opening for small firms if they are to help boost the recovery," said Mr Walker.

"Yet again missed the small business target", is it? Let's look at it another way i.e. by examining the facts. The £75 billion annual SME target equates to £18.3 billion per quarter. The actual figure for Q3 was £18.8 billion. The figure for Q2 was £20.5 billion. In other words, pace Mr Walker, the banks have in fact exceeded the SME target in each of the last two quarters. The only time they failed to do so this year was in Q1, when SME lending was £16.1 billion -- but as the Project Merlin agreement was not signed until mid-February, that seems a very pardonable lapse.

Elsewhere in the media today (in The Times, behind the paywall), we read that the "help" promised by the Government to small businesses affected by the rioting in August has been slow to materialise. According to Libby Purves, "Of £250 million worth of claims filed, only £3,584 has been paid out. Small traders complain of a chaotic, slow, repetitive bureaucratic process, shunted between five or six different people and bodies.". In the meantime private insurers have paid out £200 million in riot-related claims. Perhaps Mr Walker and his members should recognise that the banks just might not be their biggest problem.