Having revealed a second set of less-demanding Project Merlin targets, Mark Prisk, the enterprise minister, is in hot water.
Last week, in a written statement to MPs, Mark Prisk said that the Project Merlin banks were working towards “stretch” targets – a set of secret targets lower than the official targets promoted by the Treasury (officially known as “capacity” targets).
Prisk wrote that lending to SMEs in Q1 was £16.8bn, compared to the so-called “stretch” target of £17.2bn per quarter.
This “stretch” target is a fair amount below the official £19bn target that the Merlin banks had publicly agreed with the Treasury.
But here’s where it gets confusing: yesterday, Mark Prisk appears to have made a u-turn with his numbers, saying that actually Merlin banks were still working towards the “capacity” targets, not the less-demanding “stretch” targets.
He told the FT: “It’s the capacity targets to which we will hold the banks. Clearly, in any negotiations there will be other ways in which we wish to stretch the banks and challenge them, but we are monitoring the capacity targets.”
Prisk was backed up by a spokesperson for BIS, who insists that this isn’t a u-turn: “The Merlin lending target is £190bn to UK corporates including lending of £76bn to SMEs. The banks agreed this and know they will be judged against these published capacity numbers and not any others.”
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