A TORY minister dramatically resigned from the government yesterday over how it has handled fraudulent Covid business loans.

Lord Agnew of Oulton, a joint Cabinet Office and Treasury minister, confirmed his intention to quit his posts while speaking at the despatch box in the House of Lords.

He was updating peers about the £4.3 billion of Covid loans  written off by the Treasury that Labour said has gone to fraudsters.

Lord Agnew said: “Given that I am the minister for counterfraud, 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 effect.”

He concluded with a “thank you and goodbye” and left the chamber to a round of applause.

Shadow chancellor Rachel Reeves said: “This is a damning indictment of the Chancellor [Rishi Sunak] and the government’s failures on fraud.

“That the government's own anti-fraud minister feels he is unable to defend the government’s record on billions of pounds of taxpayer cash gifted to criminals tells you all you need to know about the incompetence of this government.

“It should be a source of enduring shame to the Chancellor that he has so casually written off £4.3bn of taxpayers’ money that is now in the hand of criminals and gangs.”