was today accused of peddling a ‘fairytale’ over the effectiveness of his Covid loan schemes as he faced fresh anger for allowing billions of pounds to be lost to fraud.

Lord Agnew, who quit as a Treasury minister in January, today tore into Mr Sunak’s record as Chancellor as he accused Mr Sunak of frittering away taxpayers’ cash.

The Conservative peer bemoaned how an estimated £5billion lost to fraud – through the bounceback loans scheme for small and medium-sized businesses – could have instead been spent on helping the poorest during the cost-of-living crisis.

He also claimed the public had been left ‘completely in the dark’ about the extent of taxpayers’ money being lost through Covid schemes.

Lord Agnew accused Mr Sunak of having ‘blocked’ data about the performance of Covid loans from being published during his time as Treasury chief.

The ex-Chancellor is the frontrunner among five remaining candidates in the contest to replace Mr Johnson as Tory leader and Prime Minister.

But Mr Sunak’s leadership campaign is coming under fierce attack as rivals scrutinise his record from his time in charge of the nation’s finances.

Fellow Tory contender Kemi Badenoch last night used an ITV debate to accuse Mr Sunak of not taking warnings about fraud seriously enough when he implemented Covid loan schemes as Chancellor.

She seized on a recent estimate that a total of £17 billion will be lost from various Covid loan schemes.

Rishi Sunak's Tory leadership campaign is coming under fierce attack as rivals scrutinise his record as Chancellor

Rishi Sunak’s Tory leadership campaign is coming under fierce attack as rivals scrutinise his record as Chancellor

Lord Agnew, who quit as a Treasury minister in January, accused Mr Sunak of frittering away taxpayers' cash

Lord Agnew, who quit as a Treasury minister in January, accused Mr Sunak of frittering away taxpayers’ cash

Fellow Tory contender Kemi Badenoch (pictured centre) last night used an ITV debate to accuse Mr Sunak of not taking warnings about fraud seriously enough

Fellow Tory contender Kemi Badenoch (pictured centre) last night used an ITV debate to accuse Mr Sunak of not taking warnings about fraud seriously enough

Mr Sunak told the TV debate between Tory leadership rivals that he was ‘proud of my record’ and insisted that ‘new estimates for what the fraud will be on the bounceback loans scheme have been reduced by one-third’.

He also claimed that the ‘payment performance on that loan portfolio had actually far surpassed anyone’s expectations’.

But Lord Agnew, who served under Mr Sunak in the Treasury between February 2020 and January this year, today said he was ‘astonished’ by the ex-Chancellor’s response.

‘I was astonished because these estimates that he refers to – for me – is a fairytale,’ he told Times Radio.

‘But I don’t have the data because he has blocked the data being published.

‘So what I was pushing for then and since was a dashboard of the performance of the banks who are running these loans.

‘Because then, at a glance, you and everyone else would see what is actually going on. But we don’t, we haven’t got any view at all of what’s happening.’

Lord Agnew quit as a Treasury minister at the beginning of the year and attacked the Government over its handling of fraudulent Covid business loans.  

‘The reason I resigned six months ago is that the Treasury were very, very loose on the way this thing was arranged,’ he said.

‘But, worse than that – because that’s in the past, now we’re getting to the point where the banks are seeking reimbursement for the losses from the Treasury.

‘The Treasury are not disclosing how they are managing that process.So you have a £47billion scheme with a total lack of transparency.’

Continuing his attack on Mr Sunak, he added:  ‘Until he publishes the data, which he blocked when he was there (in the Treasury), slot gacor malam ini we just don’t know.

‘And if it’s all so wonderful, why can’t we see it?It really is that simple – that’s why I get so frustrated.

‘It’s the sort of thing that undermines faith in politics, it’s all words and not deeds. I judge people by what they actually do, not what they say.’

Figures released by the state-owned British Business Bank – which oversaw support schemes for UK firms during the Covid crisis – showed that, as of September last year, there had already been defaults on loans worth £1.31billion under the bounceback loans scheme.

This was 2.4 per cent of all loans under the scheme.

Lord Agnew is backing Ms Badenoch for the Tory leadership and claimed that Mr Sunak’s handling of Covid schemes made him unsuitable to be Britain’s next PM.

He said: ‘If he puts himself forward as the guardian of the nation’s finances, then he has not been an effective guardian on this particular area.

‘That’s really what matters.’

He outlined how much of the money lost to Covid fraud could have been spent helping the poorest households during the cost-of-living crisis. 

‘What’s so frustrating is there’s billions of pounds at play here which could be diverted to help the cost-of-living crisis,’ the peer added.

‘If I’m right that there’s £5billion of fraud that could be stopped – if there were a little bit more energy deployed to it – that would reduce the taper rate on Universal Credit by another 10 per cent.

‘It would bring the cost of Universal Credit taper rate down from 53 per cent to 43 per cent.

‘One simple use of this money to do something to help the people who are really struggling would make a difference.

‘Meanwhile, the Treasury just spent months blocking any effort to move forward even after I left.’

In December last year, while he was Chancellor, Mr Sunak told MPs that analysis from an independent adviser to the Department for Business, Energy and Industrial Strategy had reduced the estimate of fraud by a third. 

A spokesperson for Mr Sunak’s leadership campaign said: ‘People are rightly angry that crooks took advantage of our Covid support schemes and Rishi feels the same. 

‘That’s why he fought to protect taxpayers’ money with a £100million investment in a new task force to tackle the issue, and a £25million body to improve the UK’s counter fraud techniques.’

The Treasury did not provide a comment.