A Labour MP has been suspended from the Parliamentary Labour Party after referring himself for investigation amid questions over taxpayer-backed Covid loans obtained by businesses with which he was involved.
Adebayo Alaba (Bayo), the MP for Southend East and Rochford, has had the Labour whip withdrawn while the party investigates concerns surrounding two Bounce Back Loans taken out during the pandemic.
At the centre of the controversy is Alaba Properties Ltd, a real estate business co-owned by the MP, which reportedly received a £50,000 Bounce Back Loan and was subsequently the subject of attempts to have the company struck off the Companies House register. Those attempts were blocked.
According to Companies House records reported in the national press, an attempt was made to strike off Alaba Properties in March 2022. On March 16, the process was halted after an unnamed third party intervened, with the record stating that cause had been shown why the company should not be struck off.
A second attempt to dissolve the company was blocked in August 2022 for the same stated reason.
The precise reason for the objections has not been publicly established. However, during the pandemic the Government introduced a “dissolution objections process”, designed to prevent companies with outstanding Bounce Back Loan liabilities from being dissolved before taxpayers’ money could be recovered.
Reports have therefore raised the question of whether this process was responsible for the objections to Alaba Properties being struck off. That has not been established.
There are also questions about the company’s eligibility for the amount it reportedly borrowed.
Under the Bounce Back Loan Scheme, businesses could borrow up to 25 per cent of their turnover, subject to a maximum loan of £50,000. A business borrowing the full £50,000 would therefore ordinarily need to declare turnover of at least £200,000 under the scheme’s calculation.
However, Alaba Properties had filed dormant accounts for the years to March 2020 and March 2021. This does not in itself establish that the company was ineligible for support, but it has prompted questions about the basis on which any loan application was made and the turnover used to calculate the amount available.
A second company associated with Mr Alaba, Onit Events Ltd, is also reported to have received a £50,000 Bounce Back Loan. No attempt is reported to have been made to dissolve that business.
Mr Alaba has acknowledged accessing two loans during the pandemic and strongly denies attempting to escape his financial responsibilities.
He told The Times: “Like many businesses and entrepreneurs, I accessed financial support during the Covid-19 pandemic. There has been no attempt to avoid my financial obligations, and I am wholeheartedly committed to ensuring that the liability is met in full.”
Mr Alaba referred himself to Labour’s investigation process and said he would cooperate fully.
Labour subsequently withdrew the whip while the matter is investigated.
The party said Mr Alaba had referred himself so the issues could be examined in accordance with Labour’s rules, adding that it expected the highest standards from its elected representatives.
Who is Bayo Alaba?
Alaba, who is of Nigerian descent and comes from the Forest Gate area of east London, entered Parliament at the 2024 general election.
He won Southend East and Rochford from the Conservatives with a 19 per cent swing, becoming the first Labour MP to represent the constituency since the seat was created in 1997.
Before entering Parliament, he served as a Labour councillor for Wanstead Park in the London Borough of Redbridge.
He is also a former paratrooper and, in 2024, took part in a parachute jump into Normandy as part of commemorations marking the 80th anniversary of the D-Day landings.
Alaba graduated from Coventry University with a degree in manufacturing and business in 1995 and later studied social politics at the London School of Economics.
Since entering Parliament, he has served on the Culture, Media and Sport Committee. He is also a member of the executive committee of the Fabian Society, the longstanding socialist organisation affiliated with the Labour Party.
He also has significant business and property interests.
According to the current Register of Members’ Financial Interests, Mr Alaba has interests in seven residential properties in London, co-owned with a family member, from which registrable rental income is received.
The Parliamentary Register also records shareholdings of more than 15 per cent in three businesses, Alaba Properties, a real estate company, Onit Events Ltd, an events consultancy, and StreetFestLive Ltd, a lifestyle media company.
Those declared interests provide relevant context to the questions now surrounding the Covid loans, particularly as Alaba Properties and Onit Events are the companies reported to have received the taxpayer-backed support.
There is no suggestion that owning the properties, receiving rental income or holding those business interests constitutes wrongdoing.
The questions concern the loans themselves, the eligibility of the companies that received them, the attempts to dissolve Alaba Properties, why those attempts were blocked, and what liabilities remained outstanding at the time.
Taxpayers left carrying the risk
The controversy also puts renewed attention on the enormous Bounce Back Loan Scheme and the losses ultimately borne by the public purse.
Introduced at extraordinary speed during the pandemic, the programme was designed to keep small businesses alive as lockdown restrictions brought large parts of the economy to a standstill.
More than 1.5 million businesses benefited from approximately £46 billion of emergency lending. Loans were backed by a 100 per cent Government guarantee.
That guarantee was crucial, banks provided the loans, but where eligible debts could not ultimately be recovered from borrowers, taxpayers could be left carrying the loss.
The speed and scale of the programme also made it vulnerable to fraud and abuse, leading to years of efforts to recover money and investigate suspicious claims.
According to Government figures cited in reports on Mr Alaba’s case, by March this year only 19 per cent of Bounce Back Loans had been repaid in full, while just over a quarter had been settled under the taxpayer-backed guarantee.
Measures were introduced during the pandemic to stop borrowers avoiding repayment by dissolving companies that still had outstanding debts, hence the significance of questions surrounding the two unsuccessful attempts to strike off Alaba Properties.
It is important to stress that no finding of wrongdoing has been made against Mr Alaba.
He denies attempting to avoid his financial obligations, says he is committed to ensuring the liability is met in full, and has referred himself to Labour’s investigation process.
Nevertheless, several questions remain.
Which companies received the two loans, what turnover was declared when the applications were made, on what basis did Alaba Properties qualify for the amount it received after filing dormant accounts, why were attempts made to dissolve the company, who objected to those attempts, and were Bounce Back Loan liabilities outstanding at the time?
The Conservatives are demanding answers and are reportedly preparing to pursue the issue when Parliament returns in September.
Shadow Cabinet Office minister Mike Wood said the revelations were concerning and called on Mr Alaba to “come clean” about whether he had attempted to avoid paying his debts.
For a financial scheme guaranteed entirely by the taxpayer, establishing exactly what happened to the money is a legitimate matter of public interest.
Mr Alaba remains an MP, but with the Labour whip suspended, he will sit outside the Parliamentary Labour Party while the investigation continues.
