How will £17bn Covid loan losses be recouped? MPs question Lord Agnew and lenders
11 March 2022
Fraud and loss within BEIS Covid loan schemes will be the focus of a one-off Business, Energy and Industrial Strategy Committee session that will examine how these funds can be recovered. Lord Agnew, who quit his ministerial role over the Government’s failure to tackle fraud, will feature ahead of representatives from the British Business Bank and several high street lenders.
- Parliament TV: Watch the session live
- Inquiry: Covid Loan Fraud
- Business, Energy and Industrial Strategy (BEIS) Committee
Purpose of the session
BEIS now estimate that £17 billion will be lost from various loan schemes designed to prop up businesses during the darkest days of the pandemic. Although much of this is expected to be in good faith, such as businesses becoming unable to pay, the Department estimates that £4.9 billion of this figure will be lost to fraud. Furthermore, these estimates are still somewhat speculative. Further economic turbulence from the cost of living crisis exacerbated by the uncertainty caused by Russia’s invasion of Ukraine and subsequent sanctions, could further hamper some legitimate business’ ability to repay.
In his recent appearance before the Treasury Committee on 9 March, Lord Agnew labeled the Treasury’s approach to tackling fraud as ‘a Dad’s Army operation’ and ‘a joke’ and condemned banks for lending to businesses that didn’t exist before the crisis. He also criticised banks for not doing their due diligence and said there was a lack of incentive for the banks responsible to recover costs since the Government are backing the loans.
MPs on the Committee will question him, the British Business Bank that dealt with loan claims and high street lenders Barclays, NatWest, Santander and HSBC about the mistakes that led to these losses and what can be done to recover them.
Tuesday 15 March 2022
- Lord Agnew, former Minister of State for Efficiency and Transformation at the Cabinet Office and HM Treasury until his resignation on 24 January 2022.
- Patrick Magee, Chief Commercial Officer, British Business Bank;
- Richard Bearman, Managing Director for Small Business Lending, British Business Bank;
- Hannah Bernard, Head of Business Banking, Barclays;
- Andrew Harrison, Director of Business Banking, NatWest/RBS;
- Suasn Davies, Head of Business Banking, Santander;
- Karl Reid, Head of Government Lending within Commercial Banking, HSBC.
- Jas Singh OBE, Consumer & Business Banking Director, Lloyds/Bank of Scotland
Image: Parliamentary copyright