Downing Street could cut 1p off income tax if it tackled Covid fraud properly, Lord Agnew of Oulton said on Monday as he dramatically quit the Government.
The peer called Downing Street’s handling of Covid business loan fraud “schoolboy” as he resigned as a minister to the Treasury and Cabinet Office while speaking in the Lords.
Speaking at the despatch box, Lord Agnew reeled off a list of alleged failings, including that 1,000 companies received Bounce Back loans that were not even trading when Covid-19 struck.
He finished the speech announcing his resignation with the words “thank you and goodbye”, before marching straight out of the Lords, as others in the Chamber applauded.
Lord Agnew, who one former MP claimed on Monday night was close to potential leadership contenders Liz Truss and Michael Gove, insisted that his resignation was not linked to the wider rebellion the Prime Minister is facing over allegations of lockdown-breaking parties.
Pressure on PM over National Insurance rise
However, his argument that Boris Johnson could deliver a major tax cut to millions of Britons before the next election if only he tackled Covid fraud more effectively will spark renewed debate about tax policy.
The Prime Minister and senior cabinet ministers on Monday argued that National Insurance must increase as planned in April to pay for the NHS, despite Tory backbench calls for the increase to be delayed or scrapped.
Lord Agnew said: “I hope that as a virtually unknown minister beyond this place, giving up my career might prompt others more important than me to get behind this and sort it out.
“It matters for all the obvious reasons, but there’s a penny of income tax waiting to be claimed if we just woke up. Total fraud loss across Government is estimated at £29 billion a year. Of course, not all can be stopped but a combination of arrogance, indolence and ignorance freezes the Government machine.
“Action taken today would give this Government a sporting chance of cutting income tax before a likely May 2024 election. If my removal helps that to happen, it’d have been worth it.”
