Government urged to deal with £4.9billion of Covid loan fraud as bags of cash found at border Business

MPs have urged the government to crack down on £4.9billion of Covid loan fraud amid reports Border Patrol seized suitcases full of cash.

Taxpayers are responsible for ‘stunning’ losses from Covid fraud, the Public Accounts Commission (PAC) said on Wednesday, accusing the Department for Business, Energy and Industrial Strategy of being ‘complacent in preventing of fraud”.

Separately, the Times revealed that border authorities arrested people “carrying large sums of money suspected [of being] coronavirus Bounce Back loans”.

The newspaper found several examples of recipients using the money – which was intended to save jobs by preventing businesses from going bankrupt – for personal expenses and gambling habits.

The committee urged the government to do more to push banks to make sure indebted companies repay overdue Bounce Back loans.

As it stands, banks have little incentive to work hard to recover the money, MPs said, because lenders can simply use the government’s 100pc guarantee to claim back from the taxpayer.

Dame Meg Hillier, who chairs the committee, said there was a “lack of urgency” in tackling fraud and non-reimbursement.

“They are tackling the end of organized crime, but at the risk of letting many more go,” she said, noting that up to 48% of loans could go unpaid.

“They don’t seem very interested.”

She said an attitude seems to have developed that because the risk of fraud and loss was recognized when the schemes were introduced – which was accepted because of the need to inject money into businesses as quickly as possible – there is no longer any need to try to cut losses or tackle the faud.

A total of £17bn is expected to be lost, of which £4.9bn was attributed to fraud.

“That’s a lot of money, when you think about the cost of living squeeze. For context, the National Insurance increase is going to raise £12billion. That’s £17billion that are potentially lost because of it. There is a lack of curiosity and urgency to pursue it,” Dame Meg said.

“It’s taxpayers’ money. We want them to be more urgent about it and learn from it.”

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This notice was published: 2022-04-27 05:00:00

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