Rachel Reeves accuses Government of 'leaving till open’ for fraudsters to ‘steal’ Covid funds

Shadow Chancellor Rachel Reeves has accused the Government of “leaving the till open” for fraudsters targeting Covid support schemes

The Labour politician has criticised Chancellor Rishi Sunak after the money was taken by scammers who targeted the coronavirus business support schemes.

Mr Sunak defended the Government’s handling of the scheme during the pandemic and said fraud linked to the schemes had been reduced by a third, according to the most recent estimate.

Speaking in Parliament, Ms Reeves said: “The Government’s own accounts show that the incompetent way in which the business support schemes were structured meant that the Chancellor has allowed fraudsters to walk away with £6.5bn of taxpayers’ money.

“That would be more than enough to cut the basic rate of income tax by a penny in the pound, worth £370-a-year to basic rate taxpayers.

“So can the Chancellor explain why quick electronic checks, such as cross-referencing with HMRC tax data, were not conducted before money was handed out and given this huge waste of taxpayers’ money, can the Chancellor confirm he will be the first witness in front of his own star chamber?”

Mr Sunak said there was a difference between a one-off saving and an annual saving on a tax cut.

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He added: “I am happy to tell her that actually in the most recent analysis from the independent adviser that estimate of fraud was reduced by a third because of the actions the Government has taken, which is welcome news."

He said money has been invested in HMRC to deal with fraud, adding: “They’re expected to recover over £2bn over the next 12 months, and with regard to bounce back loans – 55,000 loans recovered, worth up to £2bn.”

Ms Reeves, who is also the MP for Leeds West, replied: “The Chancellor might be relaxed about handing out £6.5bn or perhaps it’s £4bn to companies that didn’t deserve it, but we on this side of the House are absolutely not.”

She said reports suggest a £4.7m loan was given to a business “founded just two days before it was handed the cash”.

“It shouldn’t be beyond the wit of Government to get money to where it needs to go, to Great British business, without allowing fraudsters to steal taxpayer funds,” she said.

“Leaving the till open and unattended for thieves to clear out would be a sackable offence for a shopworker, yet apparently it’s acceptable for the Chancellor of the Exchequer.”