10 2GM Wednesday January 26 2022 | the times
News
The minister who quit over “schoolboy
errors” in tackling fraud in a pandemic
loans scheme has said the government
must do more to hold banks to account
to mitigate taxpayer losses.
Lord Agnew of Oulton told The
Times that as counter-fraud minister,
the state-owned British Business Bank
had failed to share with him the identity
of banks that he said appeared to be
linked to the majority of fraud losses on
the Bounce Back Loan Scheme.
The scheme gave £47.4 billion of
credit via 1.6 million emergency loans,
with about one in four UK companies
receiving one. Official estimates sug-
gest £17 billion may never be repaid, as
much as £5 billion of which is thought
to have been stolen by fraudsters.
Banks who lent the funds benefit
from a 100 per cent state guarantee to
Boris Johnson has been accused of
letting Britain become a “haven for
kleptocrats and money launderers”
after quietly ditching an anti-fraud law
that he appeared to promise President
Biden only a month ago.
The Times revealed last week that the
Treasury expected to recover only £1 of
every £4 stolen from the public purse
during the pandemic, with £1.5 billion
likely to be retrieved out of the
£5.8 billion stolen from the furlough
checks during the pandemic, claimed
money fraudulently and then dissolved
the firms.
The measures had been drafted by
civil servants after years of work with
anti-corruption organisations.
Dr Susan Hawley, executive director
of Spotlight on Corruption, said she
believed the order not to proceed came
directly from No 10 because the meas-
ures “weren’t sexy enough”.
She said: “The cost to the UK of not
acting on illicit foreign ownership of
property or the gaping inadequacies of
the Companies House register will
come to billions of pounds per year. NotDavid Byers Assistant Money Editor
Louisa Clarence-Smith
Chief Business Correspondent
Minister who quit says banks must
answer for pandemic fraud losses
James Hurley cover their losses once they have at-
tempted recovery action.
Agnew, 61, who resigned at the dis-
patch box on Monday over what he
claimed were “desperately inadequate”
efforts to stop taxpayers’ money being
stolen, said last night that inconsisten-
cies in lender performance and a lack of
transparency over their claims on the
taxpayer guarantee was putting public
funds at risk.
Three unnamed banks were said by
Agnew to be responsible for the vast
majority of loans handed out to compa-
nies that were no longer trading, while
only two banks were allegedly to blame
for most of the cases where money was
paid out to businesses set up after the
pandemic began.
He told The Times that he couldn’t
identify these banks because the busi-
ness bank, which runs pandemic loan
schemes, would not share the data with
him while he was counter-fraud minis-
ter. The bank indicated that it did not
recognise Agnew’s numbers.
Agnew said: “If the figures referred to
in the House of Lords on Monday are
not ‘acknowledged’ what are the cor-
rect ones? Why are they not forthcom-
ing? Lenders can only be held to ac-
count for their performance if the
public has transparency over the na-
ture of the losses they are being expect-
ed to cover.”
The bank is thought to feel it is too
early to issue reliable lender-by-lender
comparisons as there has been only one
month in which all borrowers have
been expected to make repayments.
Agnew said it was his understanding
that £1 billion had already been paid out
to cover banks’ losses on the state guar-
antee, more than £250 million of which
is estimated to be to cover fraud losses.
He called on the government to pub-lish a regular lender-by-lender break-
down of guarantee payments, along-
side estimates of the proportion of pay-
outs which were covering fraud losses.
“When will the British Business Bank
get into a regular weekly or monthly re-
porting cycle so there is transparency
on this issue?” he said.
Kevin Hollinrake, a member of the
Treasury select committee, said: “It was
always very clear that the banks were
required to carry out ‘know your client’
and fraud checks. If some banks have
not met these obligations, then they
should pick up the tab for this rather
than the taxpayer.”
The business bank declined to com-
ment. The Treasury said it was “taking
action on multiple fronts to crack down
on anyone who has sought to exploit
our schemes and bring them to justice”.
Billions lost to scammers who milked
Covid relief, Business, page 36Johnson ‘has let UK become money-laundering haven’
scheme, the self-employed income
support programme and the Eat Out to
Help Out scheme for restaurants.
An economic crime bill was consid-
ered vital to combating fraud because it
would have introduced a register of
overseas entities that owned UK
property to stop billionaires laundering
ill-gotten funds through unidentifiable
shell companies. It would also have
reformed the Companies House list to
ensure directors were made to verify
their identity before being allowed to
register a firm. The lack of checks has
been exploited by criminals who regis-
tered bogus companies with minimaldoing anything causes such damage to
the public finances, but also to ordinary
people who become victims of fraud,
not to mention our reputation overseas
as an absolute haven for kleptocrats
and money launderers.”
On December 9 the prime minister
had promised a “year of action” on
fraud at the Summit for Democracy,
hosted by Biden.
A government spokesman said: “We
remain committed to tackling eco-
nomic crime. We’re already taking
action on multiple fronts to crack down
on anyone who has sought to exploit
our Covid-19 support schemes.”Proposals to
fine parents
of late pupils
Nicola Woolcock Education EditorMore parents could be fined for their
child’s absence from school as the
government vowed to tackle poor
attendance.
More than half a million children are
persistently absent from school, accor-
ding to the latest figures, but the
Department for Education (DfE) said
there was a “postcode lottery” of how
local authorities dealt with the prob-
lem. New measures will be included in
a white paper expected in the spring.
The department found that there was
“a radically different approach to sanc-
tions across the country, with some
local authorities issuing no fines in
2020-21 to parents whose children did
not attend school, while others issued
more than 1,500”.
In a consultation published yester-
day, the DfE set out proposals for
national rules on attendance, including
when parents should be fined for their
child’s absence. They could be consid-
ered after a certain number of absences
within a certain period and for persist-
ent lateness, the proposals say.
Nadhim Zahawi, the education sec-
retary, said: “Our new proposals will...
make sure every child and family gets
the best possible support to attend
school as regularly as possible.”Colston case
law may need
‘clarification’
Jonathan Ames Legal EditorThe attorney-general will “not hesi-
tate” to refer the acquittal of the
Colston Four to senior judges if the law
on criminal damage needs clarifying.
Suella Braverman QC defended her
stance to MPs on the justice committee
yesterday, saying that as the govern-
ment’s senior law officer she had the
statutory power to ask the Court of
Appeal to assess acquittals.
A jury at Bristol crown court found
four protesters not guilty of charges of
criminal damage. Rhian Graham, 30,
Milo Ponsford, 26, Sage Willoughby, 22,
and Jake Skuse, 33, tore down a
monument to Edward Colston, an 18th-
century slave trader, during a Black
Lives Matter protest in 2020.
Many lawyers and campaigners criti-
cised Braverman for announcing that
she might refer the case to appeal
judges. She told MPs she had not yet
made a decision on a referral.
She said she was entitled to do so
under the Criminal Justice Act 1972,
and that 20 cases had been referred to
the Court of Appeal since 2020.
Braverman dismissed a suggestion
from Diane Abbott, the Labour MP,
that her remarks after the jury’s verdict
were politically motivated.
“I don’t think that anything I’ve said
has sought to undermine trial by jury,”
Braverman said. “My intention is to
legitimately identify points of law that
merit further consideration by senior
judges as our system allows.”
She said that if the Colston Four case
were referred to the Court of Appeal,
the verdict would not be overturned
but the judges could clarify the law on
criminal damage and demonstrations.
Braverman said: “There is a crowded
field of people considering the law in
this field.”Talking heads During the pandemic Dorset Museum held workshops enabling people to express their emotions through clay. The pieces are on show until March 6
ZACHARY CULPIN/BNPS