Lord Agnew resigns over government’s handling of Covid Bounce Back Loan fraud

Published by Scott Challinor on January 24th 2022, 5:05pm

Lord Agnew has resigned from his role as a minister for the Treasury after criticising the government’s handling of fraudulent applications for Covid Bounce Back Loan fraud.

The life peer, who has sat in the House of Lords since October 2017, accused the Treasury of having “no interest in the consequences of fraud” for society.

Back in December, the National Audit Office said that the government was culpable for not properly safeguarding against fraud when the £47 billion Bounce Back Loan scheme was rolled out to protect businesses in April 2020. Around a quarter of all UK businesses applied to the scheme.

As of September, £2 billion in loans had been repaid, while £1.3 billion in funds had been defaulted on, according to the British Business Bank.

Meanwhile, around £4.9 billion worth of claims out of the £47 billion in loans issued through the scheme were estimated to be fraudulent, according to the Department for Business, Energy and Industrial Strategy [BEIS].

Lord Agnew said that “a combination of arrogance, indolence and ignorance” was to blame for such a large amount of fraud being allowed to go unchecked.

Speaking in response to a question about the loans in the House of Lords, Lord Agnew stunned the chamber by suddenly delivering his resignation speech, saying: “I hope that as a virtually unknown minister beyond this place, giving up my career might prompt others to get behind this and sort it out.”

The peer then walked out of the chamber, with his parliamentary colleagues applauding as he left.

Labour shadow chancellor Rachel Reeves said that Lord Agnew’s resignation came as a “damning indictment” of the government’s failure to manage Covid Bounce Back Loan fraud, adding that it should come as an “enduring shame to [chancellor, Rishi] Sunak that he has so casually written off £4.3 billion of taxpayers’ money".

A Downing Street spokesperson thanked Lord Agnew for his “significant contribution” to government following his decision to step down, but insisted that action against loan fraudsters was being taken.

The spokesperson said: “On the wider issues that he [Lord Agnew] has raised, we introduced our unprecedented Covid support schemes at speed to protect jobs and livelihoods, helping millions of people across the UK, including nearly 12 million on the furlough scheme alone.

“We've always been clear fraud is unacceptable and are taking action against those abusing the system, with 150,000 ineligible claims blocked, £500 million recovered last year and the HMRC tax protection taskforce is expected to recover an additional £1 billion of taxpayers' money.”

Photo taken from Wikimedia Commons

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Authored By

Scott Challinor
Business Editor
January 24th 2022, 5:05pm

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