A Tory minister who quit in what has been described as â€œone of the most dramatic moments ever seenâ€ in the House of Lords has claimed that fraud is rampant in the Government.
ord Agnew of Oulton had been the minister for efficiency and transformation before announcing his resignation at the despatch box and marching out of the chamber on Monday. In his exit speech, the Tory peer criticised his partyâ€™s â€œschoolboyâ€ handling of fraudulent Covid business loans.
In a subsequent op-ed in the Financial Times, Lord Agnew said that the Government had â€œfailed spectacularlyâ€ for allowing dysfunctionality to continue on such a colossal scale.
The former minister wrote of his â€œslightly controversialâ€ exit: â€œThe failure of government in tackling fraud is, I believe, so egregious and the need for remedy so urgent that, in the end, I felt the only option was to smash some crockery to get people to take notice.
Fraud in government is rampant. Public estimates sit at just under Â£30bn a year. There is a complete lack of focus on the cost to society, or indeed the taxpayer.Lord Agnew
â€œFraud in government is rampant. Public estimates sit at just under Â£30bn a year. There is a complete lack of focus on the cost to society, or indeed the taxpayer.
â€œThe rapid roll out of the governmentâ€™s bounce-back loan scheme was an important and successful intervention to protect the productive capacity of our economy in the worst peacetime crisis since the second world war. But the cack-handed implementation and catastrophic follow-through is costing us probably hundreds of millions of pounds a month.â€
Lord Agnew went on to say that he had repeatedly tried as the minister for counter-fraud to â€œbring some focus to this issueâ€ but had reached his breaking point, citing the British Business Bank and Department for Business, Energy and Industrial Strategyâ€™s (BEIS) â€œlack of gripâ€ over syndicate banks.
â€œThe reason I have decided to speak out now is that there is still time to instil some discipline to avert even more loss,â€ he said.
â€œThe failure is not just political. The government machine has failed spectacularly both in the business department in its weak oversight of the British Business Bank and in the Treasury for allowing such dysfunctionality to continue on such a colossal scale (Â£47bn of bounce back loans have been advanced).â€
Lord Agnew further stated that one of the ways which Government could have fixed the â€œrampant fraudâ€ â€“ with an economic crime bill to fill the regulatory gaps â€“ was â€œfoolishly rejected last week as a candidate bill for the next parliamentary sessionâ€.
The outgoing minister concluded by saying: â€œIf my departure and bid for pariah status moves the machine to action, it will have been worth itâ€.
Earlier on Monday, Lord Agnew surprised the House of Lords when he was asked to appear before peers to provide an update on the Â£4.3 billion of Covid loans which the Treasury had written off.
The former minister instead criticised the â€œwoefulâ€ oversight of the bounce back loans by BEIS and the British Business Bank of the panel lenders, adding: â€œThey 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.â€
The Conservative peer said BEIS had â€œtwo counter-fraud staffâ€ at the start of the pandemic who would not â€œengage constructivelyâ€ with his counter-fraud team in the Cabinet Office.
He went on: â€œSchoolboy errors were made, for example allowing over 1,000 companies to receive bounce back loans that were not even trading when Covid struck.â€
Lord Agnew said he had been â€œarguingâ€ with Treasury and BEIS officials for nearly two years to â€œget them to lift their gameâ€, adding: â€œI have been mostly unsuccessful.â€
He said: â€œGiven 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, let alone defending our track record.
â€œIt 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.â€
He told peers: â€œI hope that as a virtually unknown minister beyond this place, giving up my career might prompt others more important than me to get behind this and sort it out.
â€œIt matters for all the obvious reasons, but thereâ€™s a penny of income tax waiting to be claimed if we just woke up.
â€œTotal fraud loss across government is estimated at Â£29 billion a year. Of course not all can be stopped but a combination of arrogance, indolence and ignorance freezes the Government machine.
â€œAction taken today would give this Government a sporting chance of cutting income tax before a likely May 2024 election.
â€œIf my removal helps that to happen, itâ€™d have been worth it.â€
Labour leader in the Lords, Baroness Smith of Basildon, said: â€œI 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.â€
The Prime Ministerâ€™s official spokesman said: â€œOn the wider issues that heâ€™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.
â€œWeâ€™ve always been clear fraud is unacceptable and are taking action against those abusing the system, with 150,000 ineligible claims blocked, Â£500 million recovered last year and the HMRC tax protection taskforce is expected to recover an additional Â£1 billion of taxpayersâ€™ money.â€