Tory minister Lord Agnew quits over government's handling of fraudulent Covid loans

The Treasury minister responsible for Whitehall efficiency described the government's track record of tackling fraud as 'lamentable'

Lord Theodore Agnew quit his position on Monday. Photo: Alamy

Conservative minister at the House of Lords, Lord Theodore Agnew of Oulton, resigned on Monday after attacking the government’s handling of fraudulent Covid-19 business loans.

Lord Agnew, the minister for efficiency and transformation at the Treasury and Cabinet Office, stepped down unexpectedly in the House of Lords after accusing the Treasury of “having no interest in the consequences of fraud to our society”.

The minister said he could no longer defend the government’s record in the Bounce Back Loan Scheme (BBLS) in clawing back more than £47 billion ($63.7bn) given to small businesses.

He said the government’s “lamentable track record” in tackling fraud was “not an attack" on Prime Minister Boris Johnson, and was in no way connected to the "partygate scandal" currently gripping No.10.

“Any prime minister of this country should be able to reasonably expect, when taking on the mantle of power, that the levers of government were actually connected to delivering services for our citizens,” he said.

Lord Agnew said that “schoolboy errors” were made by the government, including issuing more than 1,000 loans to companies “that were not even trading when Covid struck”.

Last year the National Audit office criticised the government for failing to put measures in place to prevent people exploiting Covid-19 support schemes.

The losses to both fraud and the inability to pay back loans from Covid schemes are estimated to be almost £20 billion, according to the department of Business, Energy and Industrial Strategy.

In his statement, Lord Agnew criticised the BEIS along with the Treasury and the British Business Bank.

“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 ably assisted by the Treasury who appear to have no knowledge or interest in the consequences of fraud to our economy or society.”

Last week, a British judge demanded an explanation after a drug dealer and car thief with at least 48 convictions secured a £50,000 government loan under a Covid-19 business recovery programme.

Judge Anthony Cross said that it defied belief that Asif Hussain, 44, had secured the money for a “bogus” company less than seven days after successfully applying to the government’s Bounce Back Loan Scheme.

The judge said that it was the second time within a few months that he had sentenced criminals who had secured “huge” sums from the government scheme and he gave officials 14 days to respond in writing to explain how it had happened.

Updated: January 24, 2022, 6:24 PM