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Minister dramatically quits over Govt's 'lamentable' track record of tackling Covid fraud
24 January 2022, 16:09 | Updated: 24 January 2022, 20:14
Treasury minister Lord Theodore Agnew has resigned over the Government's track record of tackling fraudulent use of a Covid loan scheme.
The Cabinet Office and Treasury minister quit on Monday and branded the Government's record of fighting fraudulent use of the Bounce Back Loan Scheme (BBLS) as "nothing less than woeful".
Lord Agnew told peers: "Given that I am the minister for counter fraud, it would be somewhat dishonest to stay on in that role if I am incapable of doing it properly."
He added: "It is for this reason that I have sadly decided to tender my resignation as a minister across the Treasury and Cabinet Office with immediate affect."
The minister slammed his book shut and signed off his speech with: "Thank you and goodbye."
He then left the House of Lords to rapturous applause.
Responding, Labour leader in the Lords Baroness Smith of Basildon said: "I think we have just witnessed one of the most dramatic moments we have ever seen in the House from a minister who felt his integrity could no longer ensure he remained a member of the Government."
Liberal Democrat Baroness Kramer said: "Can I just take this opportunity to say on behalf of these benches how much we appreciate the honour and integrity that has just been displayed by the minister.
"I don't think anyone could have raised questions more forcefully, more accurately or more completely than he has.
"On a very personal level, I want to say how much we will miss Lord Agnew in his role, not least because of his integrity."
The BBLS offers up to £50,000 to small and medium-sized businesses.
It was the largest scheme in England's programme of state-backed Covid loans.
Lord Agnew said a quarter of loans the Government had reimbursed banks for were thought to be fraudulent, and accused the Department for Business, Energy and Industrial Strategy (BEIS) of turning a blind eye.
"The oversight by both BEIS and the British Business Bank of the panel lenders of BBLs has been nothing less than woeful," he said.
"They have been assisted by the Treasury, who appear to have no knowledge or little interest in the consequences of fraud to our economy or our society."
He told peers that "schoolboy errors" had been made and said the BEIS had "two counter-fraud staff" at the start of the pandemic who would not "engage constructively" with his counter-fraud team in the Cabinet Office.
"Schoolboy errors were made, for example allowing over a thousand companies to receive bounceback loans that were not even trading when Covid struck," he said.
No 10 thanked Lord Agnew for his work but insisted the Government had been clear fraud was "unacceptable".
"We are grateful to Lord Agnew for the significant contribution he has made to Government," said the Prime Minister's official spokesman.
"On the wider issues that he's 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."
Lord Agnew denied the scandals dogging Boris Johnson were the reason he resigned his post.
"My lords, you can see that it is my deeply-held conviction that the current state of affairs is not acceptable," he told peers.
"It is worth saying that none of this related to far more dramatic political events being played out across Westminster.
"This is not an attack on the Prime Minister and I am sorry for the inconvenience it will cause.
"I hope that as a virtually unknown minister beyond this place, it might prompt others more important beyond me to get behind this and sort it out.
"It matters for all the obvious reasons but there is a penny of income tax waiting to be claimed here if we just woke up.
"Total fraud loss across Government is estimated at £29 billion a year, of course not all can be stopped but a combination of arrogance indolence and ignorance freezes the Government machine."
A British Business Bank spokesman said: "The British Business Bank stepped up to deliver the bounce back loan scheme on behalf of Government to ensure access to finance was available at pace and at scale during the pandemic. The bank ensured that key counter-fraud measures consistent with the self-certification design of the scheme were in place from the outset.
"A recent NAO report finds that 'most businesses have started to repay loans', evidenced by recent data published by the Department for Business, Energy & Industrial Strategy (BEIS) and the bank, showing the overwhelming majority of businesses are meeting their monthly repayments.
"From the launch of the scheme, the British Business Bank has worked with lenders and across Government to prevent, detect and counter fraud and put in place as quickly as possible additional measures to further mitigate fraud risks. Total prevented fraud in the bounce back loan scheme, based upon the fraud prevention activities that the lenders have been undertaking, is £2.2 billion.
"The bank is working with accredited lenders to ensure they fulfil their regulatory obligations along with their contractual commitments under the terms of the guarantee agreement, to recover the loans and tackle fraud. Lenders are deploying significant additional counter-fraud resource in support of these efforts."