Former anti-fraud minister Lord Agnew has granted more than £47billion in Covid rebound loans – after £4.9billion may have been scammed by the taxpayer while £17billion may never be reimbursed
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Covid loans have been dumped into sports cars and ‘suitcases of cash leaving the country’, Boris Johnson’s former fraud minister said today.
Lord Agnew has hit out at £47billion in loan repayments six weeks after resigning in protest at ‘schoolboy mistakes’ in the scheme.
Around 1.5 million businesses have been granted loans of up to £50,000 or a quarter of annual turnover, the vast majority of them small businesses.
But the government has estimated that £4.9billion of loans were fraudulent and £17billion will not be repaid, according to the National Audit Office.
The loans – which were closed for applications last March – had no fees or interest for one year, followed by an interest rate of 2.5% after 12 months.
Former Treasury minister Lord Agnew admitted it was a ‘complete pandemic of fraud’.
He told the Lords Digital Fraud Committee: “I don’t want to go back and try to be Captain Hindsight here… but there are still pieces of data that would help us solve this problem.”
He added: “There are hundreds of anecdotal examples of directors of these companies taking money out of the business, putting it in their private bank accounts and going out to buy a sports car.
“Now it’s a fraud. It defeats the purpose of the loan.
“The banks will have the data on this. They know exactly where the money is moving and when it is moving so can we please see the data and what they are doing about it? »
He added: “The same goes for the money that has left the country.
“How much of that £47bn hit the UK banking system and then went overseas in X weeks and months?
“I mean, I sent congratulatory letters to Border Force personnel who picked up suitcases of cash leaving the country. Literally.”
He added that a large sum, “let’s say £10billion”, went directly back to the banks to fill their own balance sheets. Lord Agnew called for a data dashboard to monitor what happened to the money.
In December, the National Audit Office said Tory ministers ‘did not put in place adequate fraud prevention measures’ when setting up the scheme.
A national investigation team had received 2,100 reports of possible fraud by October, but only had the capacity to pursue 50 cases a year.
He has set himself the target of recouping “at least £6m” over three years, or 0.01% of the total given out in Bounce Back loans.
By October there had been 43 arrests in 33 investigations and more than £3million in recoveries.
A BEIS spokesperson said: “We continue to work to combat fraud and will not tolerate those who seek to defraud consumers and taxpayers.
“Our Covid support programs have been rolled out with unprecedented speed to protect millions of jobs and businesses at a time when families need them most. Last year, lenders reported avoiding nearly £2.2 billion in potential fraud through the Bounce Back loan scheme.