Minister resigns over Covid fraud ‘schoolboy errors’by
A Treasury minister sensationally resigned at the dispatch box yesterday after criticising the “nothing less than woeful” attempts to tackle the billions lost to rampant Covid fraud.
Lord Agnew, who served as minister of state for efficiency and transformation, attacked the government’s “schoolboy errors” in allowing “thousands of companies to receive bounce back loans that were not even trading when Covid struck”.
Agnew’s blistering attack at the government comes as he couldn’t defend the Treasury effectively writing off £4.3bn in stolen Covid support payments.
Agnew made the announcement at the House of Lords this week, where he pinned the billions lost in fraud at the “arrogance, indolence and ignorance” within the Treasury that “freezes the government machine”.
Agnew targeted his anger at the “school boy errors” made in the oversight of the Covid loans by the department of business, energy and industrial strategy and at the Treasury, who had “no knowledge or little interest in the consequences of fraud to our economy or society”.
Agnew told the House of Lords that after two years of unsuccessfully arguing with Treasury and BEIS officials to lift their game. So, as the minister for counter-fraud, he concluded that it would be dishonest to stay in his position “if I am incapable of doing it properly, let alone defending our track record”.
Before marching out of the Lords, Agnew said he hoped his departure would stimulate a coordinated action to tackle fraud. This, he said, would “give this government a sporting chance at cutting income tax before a likely May 2024 election”.
Agnew signed off his statement with a “thank you and goodbye” and with that, he slammed shut his folder and left to a smatter of applause.
Angela Smith, the Labour leader in the Lords, stood up immediately and called Agnew’s mea culpa “one of the most dramatic moments” ever seen in the House of Lords “from a minister who felt his integrity could no longer ensure he remained a member of the government”.
Agnew left his post and promptly handed in a candid resignation letter to the prime minister, where he accused the government machine of being “almost impregnable” to his endless exhortations.
The former minister resigned as the prime minister continues to defend his position amidst the ongoing partygate accusations.
However, the Conservative life peer spelled out to Boris Johnson that his resignation was not linked to what he called the “noisy debates” played out across Westminster, but rather the “administrative arm of government”.
One of the more candid resignation letters I can remember. pic.twitter.com/aLjp2TnuMI
— Harry Cole (@MrHarryCole) January 25, 2022
Agnew said he couldn’t remain in his role due to the estimated £29bn lost to fraud. Although Richard Murphy, professor of accounting at Sheffield university, believes the amount lost to fraud is greatly vaster than that.
“I believe that it is much larger than that because HM revenue and customs persistently understate the UK, which is a process assisted by the Office for National Statistics refusing to recognise the scale of fraud within the economy when estimating our gross domestic product,” Murphy wrote in a blog post.
A chorus of criticism
Agnew’s criticism is the latest in a series of damning verdicts on the government’s handling of the administration of Covid loans.
In December last year, the national audit office (NAO) laid blame at the government for acting too slowly to prevent fraud. It concluded that the government prioritised getting the loans out quickly over implementing adequate fraud prevention measures. The NAO has estimated that 11% of the £47bn issued in loans were fraudulent.
Stories of Covid fraud have also hit mainstream news, with BBC Radio Four’s File on 4 documentary exposing three rogue employers exploiting the furlough scheme through faking national insurance numbers and using intimidation to silence employees.
HMRC’s Jim Harra told the Public Accounts Committee last week that the tax department seeks to claw back £1.5bn of the £5.8bn last to Covid fraud.