A Labour Member of Parliament has been suspended from the party amid scrutiny over the repayment of taxpayer-backed Covid-19 bounceback loans linked to his business interests. Bayo Alaba, elected as MP for Southend East & Rochford in 2024, is facing questions regarding loans taken out by companies he co-owns in the music and nightlife sector, some of which subsequently entered liquidation.

Company records indicate that Alaba Properties Ltd, one of Alaba’s businesses, received a £50,000 bounceback loan — the maximum amount available under the scheme — by March 2022. In the same year, efforts were made to wind up the company, but these were blocked on multiple occasions in March and August due to objections raised under the government’s dissolution objections process. This process was introduced during the pandemic to prevent businesses with outstanding Covid loans from being struck off the register in order to avoid repayment.

Another firm linked to Alaba, Onit Events, was also listed as having taken out a £50,000 bounceback loan according to accounts filed for the year ending August 2020. However, Onit Events had filed dormant accounts for the year ending August 2019, raising questions about the eligibility criteria for the loan. Under the bounceback loan scheme, companies were required to have a turnover of at least £200,000 at the time of application to qualify for the maximum loan amount.

Alaba, a former paratrooper turned entrepreneur, confirmed that he had taken out two bounceback loans but declined to specify which companies were involved or provide details about the eligibility of Alaba Properties. He stated that he is currently repaying the loans, which he expects to settle in full by the end of this year.

The shadow Cabinet Office minister, Mike Wood, said that Alaba “clearly has questions to answer” amid the ongoing investigation. Following a request for comment on the matter, the Labour Party suspended the whip from Alaba and announced that he had referred himself to the party to allow a formal inquiry in accordance with party rules.

Alaba insisted there had been no attempt to evade his financial responsibilities, adding that he was “wholeheartedly committed to ensuring that the liability is met in full.” The case comes amid wider government efforts to investigate and address potential fraud associated with the bounceback loan scheme, which, according to a December 2025 report from the Covid counterfraud commissioner, identified cases involving around 70,000 businesses with outstanding Covid loans, many suspected of fraudulent activity potentially amounting to £0.9 billion.