Treasury minister quits Government over 'schoolboy' handling of Covid fraud

'Thank you and good bye'

A minister has resigned from the government over, what he described as, it's "schoolboy" handling of fraudulent Covid business loans.

Lord Agnew of Oulton, a joint Cabinet Office and Treasury minister, confirmed his intention to quit his posts while speaking at the despatch box in the House of Lords.

He was updating peers about the £4.3 billion of Covid loans – written off by the Treasury – which Labour said has gone to “fraudsters”.

After telling the Lords he was unhappy with working between the Department for Business, Energy and Industrial Strategy (BEIS) and the Treasury, Lord Agnew said: “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 effect."

Once he had finished his speech, the Conservative peer slammed his folder shut, said “thank and goodbye”, and immediately left the chamber to applause.

He went on: “Schoolboy errors were made, for example allowing over 1,000 companies to receive bounce back loans that were not even trading when Covid struck.”

Lord Agnew said he had been “arguing” with Treasury and BEIS officials for nearly two years to “get them to lift their game”, adding: “I have been mostly unsuccessful.”

He went on to raise further concerns, including over duplicate loans and an apparent lack of ability to scrutinise the performance of lenders.

His resignation comes amid growing pressure on the Prime Minister following scandals over parties, some alleged some confirmed, to have been held at Downing Street during coronavirus lockdowns.

But Lord Agnew denied that he had resigned to put pressure on Boris Johnson.

"This is not an attack on the Prime Minister and I am sorry for the inconvenience it will cause," he said.

“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 [Covid fraud] out."

Shadow chancellor Rachel Reeves said Lord Agnew’s resignation was a “damning indictment of the Chancellor and the Government’s failures on fraud”.

She said: “That the government’s own anti-fraud minister feels he is unable to defend the Government’s record on billions of pounds of taxpayer cash gifted to criminals tells you all you need to know about the incompetence of this Government.

“It should be a source of enduring shame to the Chancellor that he has so casually written off £4.3 billion of taxpayers’ money that is now in the hand of criminals and gangs.”

No 10 insisted the government had been clear fraud was “unacceptable” following the resignation of Lord Agnew.

The PM's official spokesman said: “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."

HMRC denied Labour's claims, saying some of the funds paid out were down to error as well as fraud. HMRC says just 0.3% of the grants paid were estimated to be lost to organised crime.

The resignation comes as the investigation by civil servant Sue Gray into the behaviour of staff in Downing Street continues.

The Prime Minister's former chief advisor Dominic Cummings is among the latest to have submitted evidence to the inquiry.

And on Monday Mr Johnson was forced to announce another inquiry into allegations by a Tory MP that she was sacked because of her "muslimness".