Rishi Sunak’s Covid loans scheme blasted as several businesses fail to pay back

When it was announced in the first days of the coronavirus pandemic in March 2020, then-Chancellor Rishi Sunak described the furlough scheme as “as one of the most significant economic interventions at any point in the history of the British state and by any government anywhere in the world”. The accusations come at the time when Mr Sunak is running his campaign for the post of the UK’s Prime Minister against Liz Truss. The result will be announced on September 5.

The latest record suggests that more than 16,000 businesses that received bounce-back Covid loans have gone bust without paying the money back.

The mass insolvencies may have cost the taxpayer as much as £500million, a figure which will grow as more firms collapse, reported MailOnline.

The report suggested that the scheme was targeted by criminals because companies could self-certify to claim the cash.

Dozens of individuals have been arrested, while more than 150 directors have been barred from running companies.

Last week the business department revealed that firms collectively owing £3.2billion had fallen into arrears, while 61,475 loans were in default, potentially costing the taxpayer £1.9billion.

Official estimates showed that as much as £17billion of the £47billion loaned under the scheme will not be repaid.

Senior Tories labelled the approach to Covid handouts “shamefully negligent”.
The latest figures, obtained by the BBC under Freedom of Information laws, were described as “shocking” by a former head of the Serious Fraud Office Sir David Green.

He told MailOnline: “You wouldn’t send an army into battle without assessing the risks. And just the same in this situation, the risks, which were obvious, should have been assessed and addressed.”

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The bounce-back loan scheme allowed small businesses to take out a Government-backed loan of up to £50,000 to help them through the pandemic.

There were 1.56million bounce-back loans worth £47.4billion handed out to small firms between April 2020 and March 2021.

When announced, Boris Johnson and Mr Sunak were proud of a trailblazing scheme that would pay 80 percent of the wages of up to 11.7 million workers up to a maximum of £2,500 a month.

Mr Sunak said at the time: “We have put aside ideology and orthodoxy to mobilise the full power and resources of the British state.”

Furlough payments were just one of a number of schemes hastily introduced by the Government in the early stages of the pandemic to support individuals and businesses financially.

Others included the self-employed income support programme, ‘Eat out to help out’ – and the business Bounce Back Loan Scheme (BBLS).