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Treasury Minister Dramatically Resigns At Despatch Box Over Government's Failure To Tackle Covid Fraud

Treasury Minister Dramatically Resigns At Despatch Box Over Government's Failure To Tackle Covid Fraud

Lord Agnew quite his role as a Treasury minister at the despatch box (Parliamentlive.tv)

4 min read

A Treasury minister has dramatically resigned from his role in protest at how the government has failed to tackle fraud related to pandemic financial schemes.

Lord Agnew gave a devastating statement from the despatch box in the House of Lords this afternoon, which he concluded by tendering his resignation then walking straight out of the upper chamber to cheers.

The move is another blow to Boris Johnson’s administration, as he awaits the conclusion of an investigation into parties held in Downing Street during lockdown, alongside allegations of Islamaphobia and blackmail by government whips.

The peer was answering an urgent question after reports the Chancellor Rishi Sunak has written off £4.3billion of the £5.8billion stolen from emergency Covid-19 schemes.

In a six-minute response Agnew laid out his reasons for resigning, saying the processes for tackling fraud were not good enough.

“My deeply held conviction is the current state of affairs is not acceptable,” he told the House of Lords.

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

“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.”

He said total fraud loss across government is estimated at £29billion a year, and said while not all can be stopped, a “combination of arrogance, indolence and ignorance freezes the government machine”.

Agnew criticised "schoolboy errors" and singled out the business department (BEIS) and the British Business Bank, saying their lack of oversight of the money lent to firms “has been nothing less than woeful”.

He added: "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."

BEIS had only "two counter-fraud staff" at the start of the pandemic, who would not "engage constructively" with his counter-fraud team in the Cabinet Office, the peer claimed.

"Schoolboy errors were made, for example allowing over a thousand companies to receive bounceback loans that were not even trading when Covid struck,” Agnew added.

But he denied his resignation was related to other scandals facing Johnson and the government.

"It is worth saying that none of this related to far more dramatic political events being played out across Westminster,” he told peers.

“This is not an attack on the Prime Minister and I am sorry for the inconvenience it will cause.

"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 it out.”

The Conservative peer, who has been a minister since 2017, finished his statement by telling his fellow Lords and Ladies “thank you and goodbye” before exiting to applause.

After Agnew exited the chamber, Labour’s leader in the Lords, Baroness Smith of Basildon, described the resignation as "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”. 

In response Number 10 insisted the government had been clear fraud was “unacceptable”.

"We are grateful to Lord Agnew for the significant contribution he has made to Government," the Prime Minister's Official Spokesperson 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, £500million recovered last year and the HMRC tax protection taskforce is expected to recover an additional £1billion of taxpayers' money."

But shadow chancellor Rachel Reeves said Lord Agnew's resignation was a "damning indictment" of Sunak and the government's failure to tackle fraud.

"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," she said.

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

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