Labour Party Suspends Bayo Alaba While It Investigates MP's Failure To Pay 'Covid' Loan

The Labour Party has suspended Bayo Alaba, MP for Southend East and Rochford, over a business loan taken out through the government's Bounce Back Loan Scheme. Alaba was prevented from winding up a business due to an unpaid loan of £50,000 ($67,676), which was released during the pandemic.

While Alaba is suspended, the party will commence an investigation. A Labour Party spokesperson said: 'Bayo Alaba MP has referred himself to the Labour Party so that this matter can be investigated in line with the party's rules. We cannot comment further while the investigation is ongoing.'

What Is a Bounce Back Loan Scheme?

Also known as the BBLS, the government loan was designed to enable British businesses to access funds more quickly during the coronavirus outbreak. Many businesses struggled between 2020 and 2021 amid lockdowns and restrictions. The financial programme, as the name suggests, will supposedly help entrepreneurs bounce back from the hardship.

The British Business Bank approves and accredits the banks and financial institutions that will provide the loan. It is not the lender in the scheme. When it comes to winding up a business, the bank said: 'If you have tried to dissolve your company and have received an objection to the closing of your company, this may be due to a Bounce Back Loan.'

In the case of Alaba, he reportedly owned music-related businesses and nightclubs, which have gone into liquidation before he was elected into office in 2024. Alaba Properties Ltd is the subject business that led to his suspension.

What Is Alaba Properties Ltd?

Based on Companies House, which is hosted by the government website, Alaba Properties is a private limited company registered in London. The registered office is Ashton House, Cornwall Avenue. MP Alaba is the registered director and owner.

Alaba Properties, incorporated in March 2019, is in the business of buying, selling, letting and managing real estate. The business had two attempts at winding up—in March 2022 and August 2022. Both were not allowed because of the requirements mentioned in the BBLS.

Aside from the questions raised on the non-payment of the loan, some also contested the eligibility of Alaba Properties Ltd to get the loans. According to the loan guidelines, companies must be in business on 1 March 2020 to avail themselves of the BBLS. However, records apparently show that Alaba Properties Ltd was a 'dormant company.'

MP Alaba said: '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.'

But the Conservatives are not convinced. Mike Wood, the 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. The public deserves the truth.'

For now, MP Alaba is considered an Independent pending reinstatement from the Labour Party. It is normal for any party to suspend its member during an investigation to erase any doubt that the subject will wield their power to ensure the conclusion will favour them.