“THANK you and goodbye” was the valediction, which brought to an end a rather unusual development at Westminster this week: a UK Government minister, who actually resigned over a matter of integrity.

Amid all the partygate hoo-ha and the tensions over a possible Russian invasion of Ukraine, the honourable act by the “virtually unknown” Lord Agnew of Oulton, as the minister responsible for countering fraud described himself, went virtually unnoticed and provided only a footnote to the spray of alarming news headlines.

The Conservative peer’s unexpected announcement from the despatch box in the House of Lords was described by one parliamentary colleague as “one of the most dramatic moments ever seen” in the Upper House. To be fair, there haven’t been many.

The reason for Lord Agnew’s abrupt departure from Government was the controversial “writing-off” by the Treasury of an eye-watering £4.3 billion of Covid loans; equivalent to the entire wodge of taxpayers’ money Rishi Sunak directed to help the jobless through the Covid ordeal, announced in November 2020.

Early on in the pandemic, to combat its constricting economic effects, the Chancellor quickly unleashed a torrent of money by way of policies from the furlough scheme to the bounce-back loan scheme to keep businesses afloat.

Around a quarter of them applied for the help with some 1.5 million loans worth a ginormous £47bn being issued. Under the scheme, banks, building societies and other accredited lenders loaned companies up to £50,000, or a maximum of 25% of their annual turnover, with Government guaranteeing repayments if the firms defaulted.

Last September, the state-owned British Business Bank [BBB], which oversees the scheme, said £2bn of loans had been repaid.

Numbers from HM Revenue and Customs showed how, overall, some £5.8bn was criminally misused from Government schemes and that while £500m had already been recouped and another £1bn was set to be so by the end of next year, this still left the remaining three-quarters missing: £4.3bn.

In its report in December, the National Audit Office, the spending watchdog, concluded Government counter-fraud measures had been "implemented too slowly," which consequently meant there were “high levels of estimated fraud”.

When a sorry-looking Lord Agnew took to the dispatch box to answer an urgent question about the £4.3bn figure, he quickly moved up the rhetorical gears until he described Government oversight of the outflow of cash as “nothing less than woeful” and accused the Treasury of appearing to have “no knowledge of, or little interest in, the consequences of fraud to our economy or society”. This from a Treasury minister.

Eyes widened even further when Lord Agnew noted: “Schoolboy errors were made. For example, allowing more than 1,000 companies to receive bounce-back loans, which were not even trading when Covid struck.”

The minister claimed it was “inexcusable” that, despite pressing the Business Department and the BBB to do so for a year, a “single dashboard of management data to scrutinise lender performance” had not been created.

“The percentage of losses estimated to be from fraud rather than credit failure is 26%; I accept this is only an early approximation but it is a very worrying one,” declared Lord Agnew.

He explained how total fraud loss across Government was estimated at £29bn a year (equivalent to around 6p off income tax) and accepted not all could be prevented but noted: “A combination of arrogance, indolence and ignorance freezes the Government machine.”

Later, in an article for the Financial Times, the now ex-minister unburdened himself some more, arguing the Johnson Government had “failed spectacularly” for allowing dysfunctionality to continue on such a colossal scale. You don’t say.

He explained the Government’s failure to tackle “rampant” fraud was so egregious and the remedy so urgent, Lord Agnew felt the “only option was to smash some crockery to get people to take notice”.

The peer insisted the Government’s intervention to rapidly roll out its bounce-back loan scheme to companies had been successful but added the “cack-handed implementation and catastrophic follow-through is costing us probably hundreds of millions of pounds a month”.

Needless to say, Labour seized on the peer’s outburst and questioned where the country’s chief bookmaker was amid all the flak.

During PMQs, Labour’s Kate Osamor prodded the First Lord of the Treasury, asking him if he had agreed to the Chancellor writing off £4.3bn, which she worked out was “£154 for every household in the country that went directly into the pockets of fraudsters”.

Boris Johnson bristled and insisted: “No, of course not. We do not support fraudsters or those who steal from the public purse.”

Then finally, the Treasury submarine resurfaced, taking to social media to deny “ignoring” or “writing off” billions of pounds of taxpayers’ money lost to fraudsters from Covid-19 support schemes.

The Chancellor acknowledged “criminals have sought to exploit our support schemes” but stressed: “We’re going to do everything we can to get that money back and go after those who took advantage of the pandemic.”

However, leaking vast amounts of money from the Treasury ship is not a good look, especially for someone who wants to be the next resident in Number 10, and particularly as Sunak might not be the most popular Government figure in the coming weeks with tax hikes arriving, inflation rising and energy costs soaring.

If anything, he wants his neighbour to stay on during spring to help absorb much of the political flak and then in May get bounced out of office after what could well be disastrous local election results for the Conservatives.

The Chancellor already appears to be trying to distance himself from the forthcoming £12bn National Insurance hike, supposedly telling Tory colleagues, who want it scrapped, it’s the “Prime Minister’s tax”. Loyalty, it seems, only stretches so far up the greasy pole.

After finishing his resignation speech, the plate-smashing Lord Agnew slapped shut his folder and zipped out of the chamber, applause from fellow peers ringing in his ears. An honourable exit. Not one Boris Johnson is likely to make whatever happens in the coming days and weeks.