Fraudsters have been allowed to “walk away” with £6.5 billion of taxpayers’ cash via coronavirus business support schemes, Labour has claimed.
Shadow chancellor Rachel Reeves told MPs “leaving the till open and unattended for thieves to clear out” would be a sackable offence for a shopworker, adding: “Yet apparently it’s acceptable for the Chancellor of the Exchequer.”
But Rishi Sunak defended the Government’s handling of business support during the pandemic and said fraud linked to the schemes had been reduced by a third, according to the most recent estimate.
Speaking at Treasury questions, Ms Reeves argued “waste” has been the “hallmark” of Boris Johnson’s Government.
She also highlighted reports that a “star chamber” is being established to crackdown on the matter.
Ms Reeves said: “Indeed, the Government’s own accounts show that the incompetent way in which the business support schemes were structured meant that the Chancellor has allowed fraudsters to walk away with £6.5 billion of taxpayers’ money.
“That would be more than enough to cut the basic rate of income tax by a penny in the pound, worth £370-a-year to basic rate taxpayers.
“So can the Chancellor explain why quick electronic checks, such as cross-referencing with HMRC tax data, were not conducted before money was handed out and given this huge waste of taxpayers’ money, can the Chancellor confirm he will be the first witness in front of his own star chamber?”
Mr Sunak said there was a difference between a one-off saving and an annual saving on a tax cut.
The Chancellor added: “I am happy to tell her that actually in the most recent analysis from the independent adviser that estimate of fraud was reduced by a third because of the actions the Government has taken, which is welcome news.”
He said money has been invested in HMRC to deal with fraud, adding: “They’re expected to recover over £2 billion over the next 12 months, and with regard to bounce back loans – 55,000 loans recovered, worth up to £2 billion.”
Ms Reeves replied: “The Chancellor might be relaxed about handing out £6.5 billion or perhaps it’s £4 billion to companies that didn’t deserve it, but we on this side of the House are absolutely not.”
She added it had been reported a £4.7 million loan was given to a business “founded just two days before it was handed the cash”, adding: “It shouldn’t be beyond the wit of Government to get money to where it needs to go, to Great British business, without allowing fraudsters to steal taxpayer funds.
“Leaving the till open and unattended for thieves to clear out would be a sackable offence for a shopworker, yet apparently it’s acceptable for the Chancellor of the Exchequer.”
Ms Reeves questioned how much the Chancellor believes taxpayers will get back from the “billions of pounds lost to fraudsters”.
Mr Sunak replied: “The new taxpayer protection taskforce at HMRC is expected to recover between £1 billion and £2 billion in the next 12 months and has already made a good start on that.”
He went on to highlight pleas from MPs, including Labour, on getting money quickly to businesses at the start of the pandemic.
Mr Sunak said: “I make no apology for making sure that we got…”
Speaker Sir Lindsay Hoyle intervened at this point to halt the exchange, saying it had taken too long.