Labour MP under investigation by party over Covid loans to his businesses

Southend East & Rochford’s Bayo Alaba has been suspended while inquiry looks at bounceback loans

A Labour MP has been suspended after being questioned about government Covid loans taken out by his businesses.

Bayo Alaba, the MP for Southend East & Rochford, has referred himself to the Labour party for investigation after the Times asked about a loan given to one of his businesses during the pandemic.

After the Times contacted Labour for comment, the party suspended the whip from Alaba and said it had launched an internal investigation.

According to the newspaper, Alaba appears to have taken out two bounceback loans during Covid but questions remain about an attempt to wind up one his companies in 2022 and whether his companies were eligible in the first place.

Before Alaba was elected as an MP in 2024, he ran a number of businesses. One of these was Alaba Properties Ltd, whose accounts suggest it took out a loan, according to an expert the Times spoke to.

Companies House records show two attempts to wind up the company, which is only allowed when it has no outstanding debts, were blocked in 2022.

It remains unknown who made this intervention, but an objections process was introduced by the Department for Business to tackle the misuse of bounceback loans by business owners attempting to avoid repayments by striking off their companies.

Alaba has confirmed he took out two bounceback loans and he is understood to now be repaying the loans, according to the Times. But the MP did not answer questions on why he tried to wind up Alaba Properties Ltd and whether his companies were eligible for loans.

In a statement, he said: “Like many businesses and entrepreneurs, I accessed financial support during the Covid-19 pandemic. 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.”

A Labour spokesperson said Alaba had referred the matter to the party, which it would investigate. “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.”

Mike Wood, the shadow Cabinet Office minister, said: “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. The public deserve the truth.”