(Bloomberg) -- A U.K. minister in the ruling Conservative Party resigned after accusing Boris Johnson’s government of failing to properly root out fraud in a loan program introduced to help businesses though the pandemic.
Theodore Agnew, a Treasury and Cabinet Office responsible for Whitehall efficiency, told the House of Lords on Monday that oversight by the Business Department and British Business Bank of the Bounce Back Loan Scheme had 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 society,” he said, in a dramatic statement from the government bench. Opposition peers applauded as he left the chamber, saying: “Thank you and goodbye.”
Though not connected to the current furor surrounding the prime minister, Agnew’s resignation comes at a sensitive time. Johnson is bracing for a report into claims he allowed alcohol-fueled parties in Downing Street during lockdown, as well as battling allegations about the conduct of his ministers.
Johnson’s spokesman, Max Blain, told reporters in a regular briefing that the prime minister was grateful to Agnew for the “significant contribution he has made to government.” He said the government is “taking action against those abusing the system, with 150,000 ineligible claims blocked.”
The U.K. offered a number of pandemic lending packages totaling about 80 billion pounds ($108 billion). The BBLS, which extended 47.4 billion pounds to smaller businesses with a 100% state guarantee, have come under scrutiny for potential misuse after the spending watchdog said last year there was “limited verification and no credit checks on borrowers.”
A Bloomberg News review of almost half of the loans granted under the separate 26.4 billion-pound Coronavirus Business Interruption Loan Scheme, or CBILS, for bigger companies, found lenders handed out more than 130 million pounds to companies with questionable claims.
Millions in U.K. Covid Loans Went to Inactive or Brand-New Firms
Rachel Reeves, Treasury spokesperson for the opposition Labour party, said in an emailed statement that Agnew’s comments were a “damning indictment of the chancellor and the government’s failures on fraud.”
©2022 Bloomberg L.P.