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Rachel Reeves is set to announce an investigation into more than £600m worth of Covid contracts and will pledge to chase down firms who have ripped off the taxpayer.
The chancellor will use her speech at the Labour conference on Monday to announce she has reversed a Conservative approach to “waive” £674m worth of disputed contracts, as her party attempts to re-establish its moral standing during an ongoing row over donations.
She will confirm that a new Covid corruption commissioner will be appointed next month to claw back the money wasted on deals, saying the government will not “turn a blind eye to rip-off artists”.
It comes as the Labour leadership has faced a tirade of criticism over Sir Keir Starmer and other senior ministers receiving thousands of pounds’ worth of gifts and freebies.
Meanwhile, thousands of activists gathered at the conference in Liverpool, with many marching for the Palestinian people and others accusing Labour of preparing to slash public services.
Speaking at the event, the chancellor will vow to “seek out those who have ripped off the taxpayer, chase them down, take them to court, and claw back every penny of taxpayers’ money that they can”.
The last government was plagued by ongoing controversy over the so-called “VIP lane” contracts granted to some suppliers during the coronavirus pandemic.
Ms Reeves will say: “Billions of pounds of public money handed out to friends and donors of the Conservative Party. Billions more defrauded from the taxpayer.
“On entering government, we found £674m of PPE contracts in dispute, where we inherited a recommendation from the previous government that contract recovery should be waived.
“So we are delivering on our commitment to appoint a Covid corruption commissioner. It could not be more urgent. And I have put a block on any contract being abandoned or waived until it has been independently assessed by the Covid commissioner.
“We won’t turn a blind eye to rip-off artists and fraudsters who used a national emergency to line their own pockets. We won’t let them get away with it… we want our money back.”
Her speech comes a day after Angela Rayner attempted to explain away the prime minister’s acceptance of gifts by asserting that “all MPs do it” in an interview with the BBC’s Laura Kuenssberg.
The deputy prime minister’s response appeared to jar with the narrative of “change” Labour had promised at the election, along with the conference slogan, “Change begins”.
