A Treasury minister responsible for Whitehall efficiency has resigned over how the Government handled fraudulent Covid business loans.
Lord Theodore Agnew of Oulton told the House of Lords he was unhappy with working between the Department for Business and the Treasury.
He told peers on Monday: “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.”
Lord Agnew, who served as minister for efficiency and transformation in the Treasury and Cabinet Office since February 2020, 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.”
In response to an urgent question from Labour about Covid loan fraud, he said he was unable to defend the Government’s record.
During the pandemic the Government awarded more than £47billion to small businesses under the bounce back loan scheme (BBLS)
More than one million companies were granted cash from the scheme, which was meant to save small businesses at risk during the pandemic.
But Lord Agnew claimed that the Government, which fully guaranteed loans in the BBLS, has so far reimbursed banks almost £1billion for loans that had been defaulted on.
He added that more than a quarter of this money was estimated for loans that were fraudulent.
Lord Agnew told peers that “schoolboy errors” had been made as he set out his reason for resigning from the Government.
He said: “The oversight by both Department for Business, Energy and Industrial Strategy and the British Business Bank of the panel lenders of BBLS has been nothing less than woeful.
“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 the Lords that 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.
He added: “Schoolboy errors were made, for example allowing over a thousand companies to receive bounceback loans that were not even trading when Covid struck.”
After finishing his speech, the Treasury minister walked out of the Lords chamber to applause from his fellow peers.
Following Lord Agnew’s resignation No 10 insisted the Government had been clear fraud was “unacceptable”.
The Prime Minister’s official spokesman said: “We are grateful to Lord Agnew for the significant contribution he has made to Government.
“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.”
Ms Gray has been tasked with investigating a litany of allegations about parties and gatherings held in 2020 and 2021 while a variety of Covid restrictions were in place.
Her report is expected to be released later this week and its findings could determine Mr Johnson’s future as Prime Minister.
