Minister resigns from Lords over Government’s handling of Covid loan fraud | Conservatives

Boris Johnson suffered another blow to his authority on Monday after a Treasury minister staged a dramatic public resignation following the government’s decision to write off £4.3billion in fraudulent Covid loans.

Treasury and Cabinet Secretary Theodore Agnew called oversight of the program “nothing short of dismal” and accused officials of “schoolboy mistakes” on several fronts.

Speaking in the House of Lords, he accused the Government of ‘arrogance, indolence and ignorance’ in its attitude to fraud estimated at £29billion a year.

The row over the decision will leave Johnson fighting Tory anger on another front, with the PM facing pressure from backbench MPs over Sue Gray’s inquiry into alleged parties breaking lockdown, as well than on the increase in national insurance contributions, the tactics of the whips, and accusations of Islamophobia.

In his statement, Lord Agnew said his resignation was not an attack on the Prime Minister but that he could not remain in good conscience.

“Given that I am the Minister for Enforcement, it would be a bit dishonest to remain in this role if I am unable to do it properly. It is for this reason that I have unfortunately decided to tender my resignation as Treasury and Cabinet Minister with immediate effect.

Agnew, a life peer since 2017, was answering an urgent question from Labor about the Treasury’s decision. He left the room to the applause of his peers.

Asked by Labor peer Denis Tunnicliffe if he could provide a precise figure on the amount that had been written off, Agnew said he was speaking in defense of the government, adding: ‘But I will only be able to do that in part.

Monitoring of Covid loans by the Business Department and the British Business Bank had been “nothing short of dismal”, Agnew said.

“They were aided by the Treasury, which seems to have no knowledge or little interest in the consequences of the fraud on our economy or our society,” he said, adding that two law enforcement officers fraud to the commercial department would not “engage constructively”. with his fraud team at the Cabinet Office.

He said: ‘Schoolboy mistakes were made: for example, allowing over 1,000 companies to receive rebound loans that weren’t even traded when Covid hit.

Agnew insisted his decision had nothing to do with “far more dramatic political events unfolding across Westminster” regarding Johnson and an ongoing investigation into the No 10 parties.

He said: “This is not an attack on the Prime Minister and I am sorry for any inconvenience this will cause. I hope that as a virtually unknown minister beyond this place it might inspire others more important people than me to get behind this and fix the problem.

Labour’s Rachel Reeves, the shadow chancellor, said Agnew’s resignation was a “damning accusation against the chancellor and the government’s failures to cheat”.

She said: “The fact that the government’s own fraud minister feels unable to defend the government’s record on the billions of pounds of taxpayers’ money being offered to criminals tells you all you need to know about the incompetence of this government.

Speaking after him, Lib Dem counterpart Susan Kramer said: ‘May I take this opportunity to say on behalf of these benches how much we appreciate the honor and integrity which the Minister has just done evidence? I don’t think anyone could have asked the questions more forcefully, precisely, or more completely than he.”

Johnson’s spokesman said: ‘We are grateful to Lord Agnew for his significant contribution to government.

“On the wider issues he has raised, we have rapidly introduced our unprecedented Covid support schemes to protect jobs and livelihoods, helping millions of people across the UK, including almost 12 million on the leave program alone.

“We have always been clear that fraud is unacceptable and we are taking action against those who abuse the system, with 150,000 ineligible claims blocked, £500million recovered last year, and the Tax Protection Task Force of the HMRC is set to claw back another £1billion of taxpayers’ money.”

HMRC estimates that around £5.8bn, or 7%, of the £81.2bn paid out by the taxpayer under the various Covid-19 emergency response schemes was stolen. So far only £500million has been recovered, and he expects to be able to recoup between a further £800million and £1billion by 2023.

The National Audit Office (NAO) has singled out the government’s “inadequate” attempts to tackle fraud under the £47billion Business Bounce Back Lending (BBLS) scheme. He warned in December that loans worth £4.9bn, or 11% of the total, would be lost to fraud because anti-fraud checks had been “implemented too slowly”.

“It is clear that the government needs to improve its identification, quantification and recovery of fraudulent loans under the scheme,” Gareth Davies, the head of the NAO, said in his report.

HMRC said in its briefing paper about money lost to fraud under the various schemes, including furlough, self-employed income support scheme, BBLS and ‘eating out to help’ , that: “From the start, it was clear that the schemes would be the target of fraud.

A British Business Bank spokesperson said: “Since the launch of the [bounce-back loan] programme, the British Business Bank has worked with lenders and across government to prevent, detect and counter fraud and put additional measures in place as quickly as possible to further mitigate the risk of fraud.

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