There could be £10bn of losses in Covid fraud. Was this seen as an acceptable price to pay to keep bankers safe from harm during the pandemic?
The hallmarks of this government have been its cavalier disregard for integrity, accountability and honesty. But there are exceptions; Lord Agnew’s resignation shows ministers can do the right thing. The counter-fraud minister decided to leave over the alarming scale of pilfering taking place under the government’s coronavirus support scheme, and colleagues’ apparent unwillingness to do anything about it. His departure should be a wake-up call.
Since May 2020, around £50bn had been lent out to firms under the government-backed Covid loan scheme. The National Audit Office last December warned it had “limited verification, and no credit checks on borrowers, which made it vulnerable to fraud and losses”. The government also chose not to disclose the companies in receipt of Bounce Back loans, leaving ministers open to accusations that there was something to hide. Lord Agnew agreed, saying “desperately inadequate” efforts were made to stop government cash being stolen. The Tory peer thought that Covid loan fraud ran as high as 26%, which suggests the state handed over £10bn to thieves. The chancellor, Rishi Sunak, denied “ignoring” fraudulently claimed Covid support funds, saying he would recover looted monies. Lord Agnew thinks doing so would give Mr Sunak a “sporting chance of cutting income tax before a likely May 2024 election”. This is true under the Treasury’s fiscal rules. Labour says recouping such losses would mean hardly any need for a national insurance hike.
