Labour has called on the government to launch an investigation into how £5.8bn was stolen by fraudsters through Covid support schemes and for the Treasury do more to recover these funds.
Shadow chief secretary the Treasury Pat McFadden told MPs that the government’s target of recovering a quarter of the stolen founds was tantamount to “giving up easily”.
HM Revenue and Customs (HMRC) reported last week that it expected the Treasury’s 1200-person Taxpayer Taskforce, announced by Rishi Sunak last March, would help claw back £1.5bn of the stolen funds.
Much of the fraud occurred through the furlough and the self-employed income support schemes, which subsidised the wages of almost 15m throughout the pandemic, and the Eat Out to Help Out scheme.
HMRC said it had always made clear the schemes would be “targets for fraud”, while Treasury minister John Glen today said there were “robust” measures in place to stop fraud happening.
McFadden quipped that “if robust measures to prevent fraud were in place then why did they fail to this shocking degree?”
He added: “In November the head of HMRC estimated that around half the money lost could be recovered, why has that estimate now been downgraded to only a quarter of the funds?
“Will the minister now launch an investigation into how this happened and do more to recover this money from the fraudsters who stole it in the first place?”
The total amount spent by the Treasury on the furlough, self-employed and Eat Out to Help Out schemes was £81.2bn, meaning just over 7 per cent of all funds paid out were stolen.
This included 8.7 per cent of all funds paid out through the furlough scheme.
Glen said in the Commons that we “are not writing anything off”.
“The figures quoted are what we expect the Taxpayer Taskforce to recover in the next two years it will exist, HMRC has longer to address fraud in the schemes which it will do in the context of the wider compliance activity,” he said.
“Many of these schemes were stood up very quickly, they were refined and adapted very quickly.
“In order to meet the needs of individuals, the self-employed and businesses up and down this country, £81.2bn of payments were made across the three main schemes and whilst I recognise that there has been an element of fraud the government has never been complacent abut that.”