Tackling Fraud and Preventing Government Waste

Rachel Hopkins Excerpts

Tuesday 1st February 2022 Commons Chamber

[Rachel Hopkins (Luton South) (Lab)]

Many happy returns of the day, Madam Deputy Speaker. It is an honour to follow my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy), who made an excellent speech.

I am very pleased to be able to speak on this topic today. Good governance and public trust rely on prudent public spending. The Conservative Government have a track record of wasting public money and failing to deliver value for money. The Chancellor has written off £4.3 billion of fraud related to the covid business support schemes. Let us put that in perspective: it is equal to the total 2022-23 combined planned spending of the Department for Digital, Culture, Media and Sport, the Department for International Trade and Her Majesty’s Treasury. It is more than the entirety of the towns fund, and it is almost all the money allocated to the levelling-up fund.

People should not have to pay for the imminent Tory tax rises that will exacerbate the cost of living crisis when billions are leaked to fraud and wasted. It demonstrates this Conservative Government’s incompet-ence, letting fraudsters off the hook while continuing the underfunding of local communities and suppressing pay packets. That is especially so when it is reported that they expect to recover only £1 in every £4 lost.

The amount of fraud being written off works out at about £154 a household. That is a total cost of more than £6 million for my constituency of Luton South. I am sure my hard-working constituents would rather see it in invested in our community or have it in their pockets to spend in our local shops to drive our local economy. My constituents know that when living on a tight household budget, you have a keen eye for waste. From the Government’s actions, however, that does not seem to be a skill that Ministers have learned. We have cancelled contracts, overspent projects and written-off investments—“schoolboy errors”. Those are not my words, but those of the Government’s own anti-fraud Minister, Lord Agnew, as he resigned in protest. Are those on the Treasury Front Bench embarrassed when Lord Agnew talks of

“a combination of arrogance, indolence and ignorance”—[Official Report, House of Lords, 24 January 2022; Vol. 818, c. 21]—

in the Government’s decision making, which has led to an estimated total fraud loss across Government of £29 billion a year? It is just shameful.

The Government’s reckless waste is not just related to fraud—it cuts right across other areas of public spending. There has been £13 billion wasted on defence procurement in the last decade; £2.8 billion spent on PPE that was ultimately useless; £17 billion to rectify the Treasury’s discriminatory public sector pension reforms; and £550 million wasted by the Ministry of Justice in the past decade.

This Conservative Administration cannot be trusted—do not take it just from me and Opposition Members; take it from independent, trusted organisations. The Royal United Services Institute, the world’s oldest and the UK’s leading defence and security think-tank, has spoken of

“indifference and negligence at the heart of government.”

The bounce back loans scheme was

“vulnerable to abuse by individuals and…organised crime”

according to the British Business Bank, and the National Audit Office said:

“Counter-fraud activity was implemented too slowly to prevent fraud effectively”.

No Government should play fast and loose with public money, and the Tories’ appalling record on public spending must end.

I look forward to hearing the Minister acknowledge the shocking level of waste and Government mismanagement. I say that in the light of our greater recent focus on the Nolan principles—the principles of public life—which apply to anyone who works as a public office holder. All public office holders are both servants of the public and stewards of public resources.

Let us take the principle of selflessness. The Nolan principles state:

“Holders of public office should act solely in terms of the public interest.”

On accountability, they state:

“Holders of public office are accountable to the public for their decisions and actions and must submit themselves to the scrutiny necessary to ensure this.”

Will the Minister explain how giving out crony contracts, significant waste in Government and writing off huge levels of fraud serve the public and reflect good stewardship of public resources?

In particular, many ministerial directions were issued in 2020, and Ministers are fully accountable for those decisions. Let us take eat out to help out as an example. On 7 July 2020, the Chancellor gave a ministerial direction even though the first permanent secretary and chief executive officer of HMRC—he is the principal accounting officer, who needs to make decisions that are appropriate and consistent with managing public money—talked of “uncertainty” and said that

“there are…particular value for money risks surrounding the level of potential losses that could arise.”

Indeed, we have seen 8.5% of payments made under the scheme—£71 million—lost in fraud or paid out by mistake. I recognise that there may be some elements of fraud and payments lost, but 8.5% is a significant margin.

The Government have repeatedly shown a lack of respect for public money, and our constituents deserve better. They deserve a Government who play by the rules and value every penny of public money.