A Norfolk Conservative peer has dramatically resigned from the government over its handling of fraudulent Covid business loans.

Lord Agnew, who founded the Norfolk-based Inspiration Trust group of academy schools, quit after speaking in the House of Lords on Monday (January 24).

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He resigned as minister for efficiency and transformation in the Treasury and Cabinet Office - a post he had held since 2020.

Norfolk-born Lord Agnew told the Lords he was unhappy with working between the Department for Business, Energy and Industrial Strategy (BEIS) and the Treasury.

He said: "The oversight by both BEIS and the British Business Bank of the panel lenders of BBLS (Bounce Back Loan Scheme) had been nothing less than woeful.

"They have been assisted by the Treasury, who appear to have no knowledge or little interest in the consequences of fraud to our economy or society."

The 61-year-old said "schoolboy errors" had been made, including handing Bounce Back Loans to over a thousand companies which were not trading when Covid-19 struck.

He told peers: "Given that I am the minister for counter fraud, it would be somewhat dishonest to stay on in that role if I am incapable of doing it properly.

“It is for this reason that I have sadly decided to tender my resignation as a minister across the Treasury and Cabinet Office with immediate affect.”

Lord Agnew, created Baron of Oulton in 2017, stressed his resignation was unconnected to "far more dramatic events being played out across Westminster".

Labour leader in the Lords Baroness Smith of Basildon said: “I think we have just witnessed one of the most dramatic moments we have ever seen in the House from a minister who felt his integrity could no longer ensure he remained a member of the government.”

Prime minister Boris Johnson's official spokesman said: “We are grateful to Lord Agnew for the significant contribution he has made to government.

“On the wider issues that he’s raised, we introduced our unprecedented Covid support schemes at speed to protect jobs and livelihoods, helping millions of people across the UK, including nearly 12 million on the furlough scheme alone.

“We’ve always been clear fraud is unacceptable and are taking action against those abusing the system, with 150,000 ineligible claims blocked, £500m recovered last year and the HMRC tax protection taskforce is expected to recover an additional £1bn of taxpayers’ money.”