Remember Rishi-mania? It came around the time of the ‘Eat Out to Help Out’ scheme, which was designed to help the restaurant trade recover from the Covid lockdowns. As chancellor, Sunak won over stomachs – and hearts – with his generous financial scheme to help everybody through the crisis. Cometh the hour, cometh the Treasury.
But it is now quite clear that hundreds of millions, even billions, of pounds were stolen from the taxpayer through these schemes. And for all his supposed competence as a technocratic administrator, in reality, Sunak presided over fraud on an unprecedented scale. It may be just a matter of time before this massive scandal catches up with him.
Sunak, a notorious hard worker, excels at exuding an air of professionalism and efficiency. It’s how he became Prime Minister – admittedly only once all the other contenders had been eliminated. Even now he is regarded by the markets as a tough-minded former banker. And yet the details emerging of the epic scale of fraud committed during the pandemic are disturbing, to put it mildly. Giving evidence to the Treasury Select Committee yesterday, HMRC chief executive Jim Herra admitted that at least £4.5 billion had been lost to fraud through three Covid schemes — furlough, help for the self-employed and ‘Eat Out to Help Out’. Of that total, Herra only expects £1.1 billion to be recovered. Many of the companies hardly even bothered to cover their tracks. Herra pointed to one restaurant that was reporting record sales while its staff were furloughed. But, heck, who cared? Everyone was getting paid.
The government’s pandemic response has created a something-for-nothing culture
The trouble is, it should have been obvious to anyone that there was going to be massive fraud. It is not as if the restaurant trade is famous for the accuracy of its book-keeping. Allowing traders to declare themselves how many meals they had served and claim half the money back from the government was an invitation to inflate the numbers. Of the total £840 million the scheme cost, it is now clear that 10 per cent – almost £100 million – came from fiddling the books.
The furlough scheme was not much better, with companies able to claim back staff salaries with minimal checks. And while the self-employed were harshly ignored for much of lockdown, the scheme that was finally launched was wide open to abuse. That’s before we even get into the ‘bounce back’ loans for companies or the investment in start-ups, many of which are now going bust.
In reality, Sunak presided over a Treasury that was beyond cavalier with public money. Aided and abetted by Boris Johnson as prime minister, he ran up vast debts, pressured the Bank of England into printing the money to pay for it – and assumed that it would all work out for the best.
We are now living through the consequences: the worst inflation in half a century; a near-bankrupt British state; and a serious undermining of the nation’s work ethic. The government’s pandemic response has created a something-for-nothing culture which has in turn led to more than a million people leaving the workforce. Sunak is largely to blame for that, which is why his lectures on the need to balance the books ring hollow. The only mystery is how his reputation for competence has lasted so long.
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