UK govt responds to claims it ignored billions of pounds of Covid fraud

Figures showed that 2.5% of the more than £19 billion given in self-employment support was lost to fraud

UK Chancellor Rishi Sunak has rejected media reports that the government had “written off” £4.3 billion ($5.76 billion) of Covid support that was stolen by fraudsters during the pandemic, despite setting up a taskforce to tackle scammers.

In its annual report, the UK’s tax service, HM Revenue and Customs (HMRC), outlined some of the fraud that had been witnessed. It said 2.5% of the more than £19 billion ($25.43 billion) given in self-employment support had been lost to fraud.

If the government had written off the loans, it would have meant £1 ($1.34) out of every £4 ($5.36) stolen by fraudsters would have been lost.

“A lot of people are concerned about fraud in our Covid support measures and they’re absolutely right to be. No, I’m not ignoring it, and I’m definitely not ‘writing it off,’” Sunak declared on Twitter on Wednesday.

Admitting that “criminals have sought to exploit our [Covid] support schemes,” the UK chancellor pledged that the government would “do everything” in its power to “go after those who took advantage of the pandemic.”

Sunak’s statement came shortly after UK Prime Minister Boris Johnson told the House of Commons that the government did “not support fraudsters or those who steal from the public purse” in response to a question about the alleged loan write-off.

The UK government recently invested over £100 million in an anti-fraud department within HMRC, where staff have written to 75,000 people as part of enquiries into potentially fraudulent activity.

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Initial media reports from UK newspapers suggested that HMRC figures released earlier in January showed the government only expected to be able to claw back a quarter of the money lost to fraudsters through Covid schemes.

On Monday, following those reports, Lord Theodore Agnew, who’d been tasked with leading the efforts to combat Covid loan fraud, resigned in the House of Lords, citing the government’s “lamentable track record” on the issue. 

Citing the progress already made, Sunak claimed the government has already halted or recovered around £2.2 billion ($2.95 billion) in alleged fraud from the Bounce Back Loans scheme and £743 million ($995.4 million) from overclaimed furlough grants.