With the Government expected to write off billions of pounds worth of the COVID bounce back loans, Shaz Memon writes that businesses have every right to be just as furious as Lord Agnew was when announcing his resignation.
Business owners across the country are feeling let down by the government, and it has nothing to do with parties at Downing Street. Instead, it's the news of the estimated £5.8 billion that has been fraudulently claimed in COVID support payments, and the expectation that the majority of this will, in effect, be written off.
Last week, Lord Agnew, the minister responsible for Whitehall efficiency and counter-fraud, dramatically resigned, with a damning address in the upper chamber where he accused the Treasury of having 'no knowledge or little interest in the consequences of fraud to our economy or our society.'
I work with dental practices across the country, all of whom had to shut their doors completely during the first lockdown. Many, compelled by a sense of duty, spent hours on the phone unpaid, trying to help as best as they could to ease their patients' pain, while knowing that their at-a-distance interventions would never be sufficient. Every one of them has horror stories of DIY dentistry gone wrong, and the emotional and financial hit they had to endure. It will be a familiar tale for businesses owners in other sectors.
Throughout this period, furlough payments, and in some cases bounce back loans, were essential to keep businesses afloat. They were gratefully received, as was shown by the huge popularity ratings chancellor Rishi Sunak enjoyed at the time.
These schemes were introduced at breakneck speed in response to an unprecedented crisis. It is understandable they were not one hundred percent watertight. Nor can the government be blamed for the unscrupulousness of the people who exploited the rules.
Nonetheless, now that we are aware of the scale of the fraud, it is imperative that the government's response is precise and methodical. They owe it to all the businesses who obeyed both the spirit and the letter of the law to get this right. Labour's shadow chancellor Rachel Reeves has described the COVID fraud as a 'source of enduring shame to the chancellor' but his will only be the case if the fraudsters get away with it.
In response to Lord Agnew's resignation, Sunak has said 'I'm not ignoring it, and I'm definitely not "writing it off". We're going to do everything we can to get that money back and go after those who took advantage of the pandemic.'
Yet, as recently as November, an HMRC spokesperson was talking up the aspirations of the Taxpayer Protection Taskforce 'to recover £1 billion from fraudulent or incorrect payments over the next two years.' £1 billion is a long way short of the £5.8 billion estimate. If Sunak is serious, he will need to do much, much better than this.
When touted as a potential successor to the prime minister, Sunak is often seen as Boris Johnson's polar opposite. Immaculately dressed, sensible, a good eye for detail. But if billions of pounds can be stolen from under his nose, without being reclaimed and without serious consequences for the fraudsters, it will be hard for him to maintain this image.
At which point, business owners and the public at large may conclude that the £5.8 billion COVID fraud does have something to do with the parties at Downing Street after all. Maybe it was made possible by a government that is focused on image rather than reality, at laying down the law rather than following it.
This truly would be a source of enduring shame, and not just for the chancellor.
Shaz Memon is founder of digital marketing agency Digimax. He has written for The Independent, City AM, Reuters, and TRT World and appeared on Channel 5 News.
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