Failed fraud policy in the UK shows how indy Scotland can get it right

There can be a certain virtuous sense of self-satisfaction in Scotland that its government has not suffered this malaise. That satisfaction can also support a sense that Scotland, when independent, might enjoy both better governance and government than is seen in London right now.

I do, however, wish to sound a note of caution. Doing so I refer to one of the week’s less notable, but nonetheless quite extraordinary, political moments. This was the resignation of the almost unknown Tory life peer, Lord Agnew, who had responsibility for tackling corruption within the UK Government in an appointment that spread across the Treasury and Cabinet Office.

On Monday afternoon Agnew stood at the House of Lords’ despatch box and without prior warning announced that he was resigning his post. His reason was straightforward. He said he could no longer defend the Government’s record in tackling corruption when there was no sign that the Government had any desire to tackle the issue.

READ MORE: Who is Lord Agnew of Oulton, the minister who resigned live from the despatch box?

As resignations go this was dramatic. I am sure that previously unannounced resignations have happened from the despatch box but not, as I recall, in my lifetime.

Nor have they happened in my life because a minister has turned on his own government and party saying he can no longer do the job they asked him to undertake because they will not support him to do it.

Tory peer Lord Agnew resigned from his role as anti-fraud minister in dramatic fashion earlier this week

In that case, Lord Agnew’s message was quite clear. What he was saying was that the Government really does not care about corruption. Even more tellingly, he was saying that their pretence that they do care was hypocritical. For saying so he was applauded by the House of Lords. A week after that House had rejected 14 Tory government proposals in a day such applause for anyone from the Tory frontbench is rare.

The applause was, however, appropriate. It is apparent that this government does not care about corruption. For example, as Labour peer Lord Sikka, with whom I have worked for 20 years, noted in questions on this issue this week, whilst no-one can open an ISA bank account in the UK without providing their national insurance number, companies managed to claim Covid loans and furlough support without ever having to prove that they had traded or employed anyone. The Tory peer tasked with answering that question admitted he had no idea why this had been the case.

READ MORE: Tories urged to act after peer revealed billions were lost to Covid fraudsters

I am not surprised, however, because the failure of the Government on this issue is persistent. So, for example, whilst we all know that the Government makes much fuss about benefit fraud, which has low overall cost, the Government makes no effort at all to regulate companies in the UK, and they are where most fraud is likely to happen.

There is, quite literally, no agency tasked with actually enforcing UK company law. Companies House, which records whatever details those companies wish to put on public record does only the most rudimentary checks, including that postcodes on documents are real. Thereafter, it lets any nonsense be filed.

There is much the same problem at HM Revenue & Customs, where there are ever declining resources to check tax returns submitted, meaning that most people will never have their affairs looked at in their lifetimes whilst VAT registered traders can now expect a visit from a tax inspector less than once in every two hundred years, when once they happened every three years on average. I have no doubt that fraud is significantly more commonplace as a result.

So, what is the reason for noting all this? Simply to say that once fraud is accepted as normal in a society, as is becoming the case in the UK right now, it becomes very much harder to get rid of it.

Scotland will, however, have the chance to reset its approach to this issue when it becomes independent. If its economy is to work then; if business and the people of the country are to be protected from fraud; if there is to be fair competition and if all taxes are to be collected at that time then a very strong policy on corruption will be required.

The reason is simple. Keeping fraud to a minimum gives a country a competitive advantage over neighbours that do not. Westminster may be indifferent to fraud but Scotland must never be. And by not being so Scotland will win, handsomely when the Tories are, right now, literally choosing to be losers.