Treasury minister Lord Agnew resigns over government’s ‘lamentable’ record on tackling COVID business loan fraud

A minister has resigned at the despatch box after criticising the government’s record on tackling fraud in the coronavirus business schemes.

Lord Agnew, who was both a Treasury and Cabinet Office minister, dramatically quit his role in Boris Johnson’s government in the House of Lords on Monday afternoon, saying the Department for Business, Energy and Industrial Strategy had shown a “lamentable” oversight of COVID loan schemes which has resulted in large amounts of fraud being committed.

The peer told the chamber that the Treasury “appears to have no knowledge or little interest in the consequences of fraud to our economy or our society”, adding that a mix of “arrogance, indolence and ignorance freezes the government machine”.

Lord Agnew added that his remarks and resignation is “not an attack on the prime minister”.

More than £47bn was given to small businesses under the government’s largest coronavirus scheme – the bounce back loan scheme (BBLS) – which had the aim of saving companies at risk during the pandemic.

The National Audit Office has estimated that as much as £5bn of this could have been fraudulently claimed.

A Downing Street spokesperson said: “We are grateful to Lord Agnew for his significant contribution he has made to government.”

Prior to announcing his resignation, Lord Agnew was updating peers about the £4.3 billion of COVID loans – written off by the Treasury – which Labour said has gone to “fraudsters”.

The former minister said government oversight of the various coronavirus business schemes has been “nothing less than desperately inadequate” and that “schoolboy errors were made”.

“My Lords, you can see is my deeply held conviction that the current state of affairs is not acceptable,” he told peers.

“Given that I’m the minister for counter fraud, it feels somewhat dishonest to stay on in that role if I’m incapable of doing it properly, let alone defending our track record.

“It is that is for this reason that I’ve suddenly decided to tender my resignation as a minister across the Treasury and Cabinet Office with immediate effect.

“I would be grateful if my noble Lord would pass this lead on to the prime minister at his earliest convenience.

“It is worth saying that none of this relates to far more dramatic political events being played out across Westminster. This is not an attack on the Prime Minister and I’m sorry for the inconvenience it will cause.”

Lord Agnew added: “Total fraud loss across government is estimated at £29bn a year.

“Of course, not all can be stopped – but a combination of arrogance, indolence and ignorance freezes the government machine.

“Action taken today will give this government a sporting chance of cutting income tax before a likely may 2024 election. If my removal helps that to happen, it would have been worth it.”

Responding to Lord Agnew’s resignation, Labour’s deputy leader Angela Rayner posted on social media: “Lord Agnew’s resignation over this government’s failure is more integrity than Boris Johnson can manage.

“It is no surprise that a minister feels unable to defend the waste of billions of taxpayer pounds on crony contracts and fraud. ‘Arrogance, indolence and ignorance’ indeed.”