FirstFT: UK watchdog attacks ‘inadequate’ efforts to tackle Covid loan fraud

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The UK government’s measures to prevent fraud in its bounceback Covid-19 loan scheme for small businesses were “inadequate” and it needs to do more to recoup the estimated £5bn that was stolen, according to parliament’s spending watchdog.

The National Audit Office highlighted the Department for Business, Energy and Industrial Strategy’s focus on organised crime’s exploitation of the programme in a report today, and raised the risk of smaller fraudsters being able to escape unpunished.

The bounceback scheme, launched in May 2020, guaranteed bank loans of up to £50,000 to support businesses during the coronavirus pandemic. It was designed to deliver loans as quickly as possible, with limited verification and lenders performing no credit checks.

About a quarter of all UK companies applied, but official estimates suggested that close to £5bn of the £47bn disbursed could be lost in fraud.

Thanks for reading FirstFT Europe/Africa. Here’s the rest of today’s news — Jennifer

Five more stories in the news

1. Opec+ sticks with oil supply increase Saudi Arabia, Opec’s de facto leader, has agreed to keep increasing monthly crude oil production following a charm offensive by the Biden administration, even as oil prices have fallen almost 20 per cent in the past week.

2. Nagel tipped to run Germany’s Bundesbank Joachim Nagel, a top executive at the Bank for International Settlements, has moved into pole position to head Germany’s central bank, in one of the first big appointments by the incoming coalition government, according to a person with direct knowledge of the matter.

3. Didi Chuxing to delist from New York The Chinese ride-hailing group hit by Beijing’s regulatory crackdown on technology companies said it would delist from the New York Stock Exchange and go public in Hong Kong, in an acceleration of China’s decoupling from US capital markets.

4. Credit Suisse chair pledges to overhaul bankers’ pay António Horta-Osório vowed at the FT’s Global Banking Summit to overhaul pay policy after a succession of crises enraged investors and sent the bank’s share price tumbling. The group will aim to engineer a cultural shift that makes employees more accountable for decisions taken on managing risk.

5. Real Madrid and Barcelona seek to thwart €2bn La Liga deal Spain’s two most successful clubs, along with Athletic Bilbao, have launched a late bid to thwart a €2bn cash injection from private equity group CVC with a counter-offer they claim is economically superior.

Coronavirus digest

• Global stock markets experienced volatile trading as investors and governments scrambled to respond to the Omicron coronavirus variant.

• Joe Biden announced free rapid tests would be available in the US to help curb the spread of Omicron, a day after the nation’s first case of the variant was confirmed.

• The Federal Reserve’s emergency lending facilities threaten to set a dangerous precedent that will increase pressure to fund all manner of government projects, an outgoing top official has warned.

• The Omicron variant has been linked to a substantial rise in reinfections in South Africa compared with previous waves.

• Tools needed to sequence genomes are concentrated in richer countries, hindering global efforts to track coronavirus mutations.

The days ahead

Turkey inflation Annual inflation is expected to cross the 20 per cent threshold, according to a Reuters poll, which would represent its highest rate since November 2018, when Turkey was reeling from a currency crisis.

N Ireland protocol talks UK Brexit minister Lord David Frost and Maros Sefcovic, EU Brexit commissioner, will continue negotiations on whether to trigger Article 16, the safeguarding clause that would suspend checks on goods travelling to Northern Ireland from the rest of Britain.

Economic data Purchasing managers’ index data are due for the eurozone, France, Germany, Italy, the UK and the US, where non-farm payrolls are expected to show 550,000 jobs were created last month while the unemployment rate dipped to 4.5 per cent.

UK listing rules come into force Reforms aimed at making the City more attractive to fast-growing technology and biotech companies kick in.

Gambia presidential election The country is due to hold its first presidential election tomorrow since ousting longtime dictator Yahya Jammeh.

What else we’re reading

A bleak winter awaits poorer Britons Londoners are falling into penury as prices rise and a government decision to end a £20 a week uplift in universal credit begins to bite. “For a lot of people whose lives were already hard, things have just got harder,” said Todd Benjamin, a retired CNN anchor who sits on the board of social enterprise City Harvest.

Erdogan tightens grip on Turkey’s economy Finance minister Lutfi Elvan’s resignation came as little surprise to analysts. But his replacement by a loyalist to Recep Tayyip Erdogan underlined the extent to which control of the country’s $795bn economy is now in the hands of one man.

The problem with vanishing cash Claer Barrett is all for exposing children early to money and payments, but what worries her is the invisibility of digital transactions. “Do children realise that actual money is being spent, or think this ‘magic card’ simply makes everything possible?” she asks.

Is Apple the latest meme stock? Puzzling activity in the iPhone maker’s shares this week has strategists pointing to an explosion of trading in options, a hallmark of the “meme stock” craze this year that has now been linked to one of the world’s most valuable companies.

FT/McKinsey Book of the Year Nicole Perlroth’s sobering investigation into the cyber weapons arms race, This Is How They Tell Me the World Ends, was named Financial Times and McKinsey Business Book of the Year for 2021. “I hope this award will prompt [CEOs] to read this book and pay attention,” said FT editor Roula Khalaf, who chaired the judges.

Thank you to everyone who took part in our poll yesterday. Forty-eight per cent of respondents thought negotiators would not be able to resurrect the Iran nuclear deal.

Travel

The pandemic has led to the cancellation of Germany’s 500-year-old Rothenburg Christmas market for the second year in a row. But the town’s residents are determined to keep the festive spirit alive.