A former fraud minister said the Covid loan scheme meant "happy days if you were a crook" as he revealed shockingly lax Treasury checks on relief cash for firms.
Lord Agnew, who was a minister in the Treasury and Cabinet Office, dramatically quit at the despatch box in January, hitting out at the Tories' "lamentable" record on tackling fraud.
Giving evidence before MPs on the Commons Treasury Committee on Wednesday, the peer branded the the government's anti-fraud efforts a “Dad’s Army” operation where basic checks were overlooked.
He lifted the lid on extraordinary levels of Covid fraud, saying: "I sent letters of congratulations to Border Force staff for picking up suitcases of cash leaving the country."
The peer also said the cost of Covid loan fraud would significantly surpass Chancellor Rishi Sunak's predictions.
It comes two months after the Treasury confirmed that it wrote off £4.3 billion worth of the £5.8 billion of fraud witnessed across its Covid business loan schemes.
Ministers have defended the scheme saying cash had to be rushed out of the door to ensure firms didn't go under.
Lord Agnew said he stepped down from his role after deciding he could not defend actions in regards to bounce back loans for smaller firms, where the Treasury reported £4.9 billion worth of fraud.
“I was asked a question to defend our track record on this particular intervention about bounce back loans and I could not stand up with any great integrity and say we did a great job, because we hadn’t,” he told the Treasury Select Committee.
“Intellectually and at the top policy level, I believe it was an important intervention – we had to get the money out quickly to legitimate businesses and give them the support they needed.
“But on the fraud side, it was just a Dad’s Army operation.”
The former minister said it took officials “six weeks” to create a system which could catch fraudsters making duplicate claims for loans but that “60% of the money had already gone out of the door”.
“I was writing letters of congratulations to border force staff for picking up suitcases of cash leaving the country,” he commented.
“It was happy days if you were a crook in those first few months
“I believe very strongly that the taxpayer deserves that the Government should use their money wisely and an issue like the management of countering fraud is a cross-party issue.
“I don’t think there is anybody who would condone a weak system which allows money to fall into the laps of crooks, and that’s what I saw happening.
“In any of these situations you try and bring about change from inside the tent but you get to a point where that just doesn’t seem to be working.”
