Labour MP suspended as party launches investigation into Covid loans

A Labour MP has been suspended from the party after a newspaper report questioned whether he had tried to avoid repaying a government Covid loan.

Bayo Alaba referred himself to the Labour Party over the issue and an internal investigation has been launched.

The MP for Southend East and Rochford has also had the whip suspended - meaning he will now sit as an independent MP - although it is understood the investigation does not at this stage imply any wrongdoing.

A Labour Party spokesperson said: "Bayo Alaba MP has referred himself to the Labour Party so that these matters can be investigated in line with the party's rules."

It continued: "The Labour Party expects the highest standards from our elected representatives and we have robust processes in place to ensure those high standards are upheld.

"We cannot comment further while the investigation is ongoing."

The Times newspaper has reported allegations that Alaba attempted to wind up one of his business before settling one of two bounce back loans he had taken out.

During the pandemic, taxpayer-funded loans of between £2,000 and £50,000 were given to small and medium-sized businesses to ease financial problems.

Alaba has admitted taking out two bounce back loans but he insisted he has not tried to avoid his financial obligations and it is understood he believes they will be repaid in full by the end of this year.

Alaba is the registered co-owner of a company called Alaba Properties. Records in Companies House show an attempt was made to wind up the company in March 2022, however, this was blocked for unstated reasons.

A second attempt was then made, which was also blocked in August 2022.

Alaba said: "Like many businesses and entrepreneurs, I accessed financial support during the Covid-19 pandemic.

"I am proud of my background as a small business owner, and of the work I have done since entering politics to support the business community, in part because I know just how difficult things can be.

"There has been no attempt to avoid my financial obligations, and I am wholeheartedly committed to ensuring that the liability is met in full.

"I've referred myself to the Labour Party's investigations process on the matter and I'll cooperate fully."

Mike Wood, a Conservative shadow Cabinet Office minister, said: "These are concerning revelations and Alaba clearly has questions to answer.

"Alaba needs to come clean about whether he tried to avoid paying his debts, and ministers should tell us if they had to intervene to stop it."