Barclays Bank has said it will not sign up to any government plan to impose targets for lending to small businesses.

Steve Cooper, head of Barclays' small business division told the Financial Times: "I'm not going to sign up to a target. I don't want to create an expectation that if Barclays said no yesterday it could say yes tomorrow (because it has a target to achieve)."

The government aims to ensure part of the banks’ collective £15 billion in half-year profits is used to help stimulate the economy by increasing lending to the 4m plus small and midsized businesses – the powerhouse for recovery.

The target will apply to all banks – not just those in which it holds a stake following the bailout. Lloyds group (which includes Halifax and Bank of Scotland) and Royal Bank of Scotland (which includes NatWest) have already had targets imposed, which have been accepted. HSBC, in which like Barclays the government holds no equity, has already rejected the idea of government-imposed targets.

Figures from The British Bankers' Association (BBA) show £598m was lent in new loans in June, £70m more than in May. But still the sums are well below those pre-recession.

The BBA claims the lower lending is down to a falling demand from businesses for credit and not an unwillingness on the part of banks to lend.

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