Rishi Sunak’s Covid loan scheme lambasted as several companies fail to repay | United Kingdom | New
When announced in the early days of the coronavirus pandemic in March 2020, then-Chancellor Rishi Sunak described the furlough scheme as “one of the most significant economic interventions at any time in the history of the British state and by any government anywhere. in the world.” The charges come as Mr Sunak is campaigning for the post of British 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 Covid rebound loans went bankrupt without repaying the money.
The mass insolvencies may have cost the taxpayer up to £500m, a figure that will rise as more businesses collapse, MailOnline reported.
The report suggested the scheme was being targeted by criminals, as companies could self-certify to claim the money.
Dozens of individuals have been arrested, while more than 150 directors have been banned from running businesses.
Last week the Business Department revealed that businesses collectively owing £3.2billion were in arrears, while 61,475 loans were in default, which could cost the taxpayer £1.9billion .
Official estimates have shown that as much as £17bn of the £47bn loaned under the scheme will not be repaid.
Senior Tories have called the approach to the Covid documents “disgracefully negligent”.
The latest figures, obtained by the BBC under freedom of information laws, have been 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 still in this situation, the risks, which were obvious, should have been assessed and addressed.
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The Rebound Loan Scheme has enabled small businesses to take out a government guaranteed loan of up to £50,000 to help them through the pandemic.
There were 1.56million rebound loans worth £47.4billion granted to small businesses between April 2020 and March 2021.
When announced, Boris Johnson and Mr Sunak were proud of a ground-breaking scheme which would pay 80% 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 set aside ideology and orthodoxy to mobilize the full power and resources of the British state.’
Furlough payments were just one of many hastily introduced by the government at the start of the pandemic to financially support individuals and businesses.
Others included the self-employed income support program, “Eat out to help out” – and the Bounce Back Loan Scheme (BBLS).