Rishi Sunak Defends Bounce Back Loan Scheme Amid Fraud Claims
Rishi Sunak defended the pandemic-era Bounce Back Loan (BBL) scheme amid claims of excessive fraud. The BBL scheme offered loans of up to £50,000 with a 100% government guarantee to lenders. Around 1.5 million BBLs were issued, worth about £46 billion, making it the largest scheme of its kind.
Lenders flagged roughly £1.9 billion as fraudulent, and a Covid Counter-fraud commissioner report estimated fraud and error up to £2.8 billion, with true totals potentially higher. The scheme was launched in less than two weeks in May 2020 with limited checks beyond standard banking controls. Loans were capped at 25% of turnover, and lenders relied on information provided by businesses.
After launch, additional checks were introduced, including a system to prevent one company from taking multiple loans across different banks. Sunak argued that delaying the scheme's launch to improve checks would have risked many businesses, especially since 40% of BBLs were issued in the first four weeks.
He claimed the fraud rate of around 4% was in line with other large schemes such as universal credit and housing benefits. Sunak also stated that data improvements would help reduce such trade-offs in future similar schemes.
