Labour MP suspended after questions over Covid bounceback loan

A Labour Party MP has been suspended over questions relating to a taxpayer-funded Covid business loan for a company he reportedly co-owned.

Perran Moon, MP for Camborne and Redruth, is under investigation by the party over claims that he tried to wind up his business without paying back a bounceback loan, which was offered to small businesses during the pandemic.

He is the second Labour MP to be investigated after Bayo Alaba, the MP for Southend East and Rochford, is understood to have referred himself to the Labour Party for investigation over a similar action in August. However, it is unclear how similar the precise circumstances of the cases are.

It is understood that Mr Moon voluntarily referred himself to the Labour Party so that the issue could be investigated and that he has agreed to be administratively suspended while the process is ongoing.

The Labour Whip will also be suspended while the investigation is ongoing.

The investigation is understood to be a precautionary step with his suspension carried out on a without prejudice basis that does not imply any finding of wrongdoing at this stage.

Mr Moon told The Independent that the company, which he co-owns, had applied for the loan to help with “staffing and other essential business costs during the significant turbulence of the Covid pandemic”.

Under the scheme, businesses could borrow up to a maximum of £50,000, which Mr Moon’s business reportedly did.

On Companies House, he is listed as a director for a business named Autoswot Ltd, which shows its accounts as overdue since 2022 with an active proposal against the business to strike it off.

The MP said the business had begun to repay the loan but ceased trading due to “unforeseen external market pressures and despite the best efforts of staff” in late 2022.

“When the company took out the loan, it fully intended to repay it, and it made repayments until it ceased trading,” he said.

“The company has regularly sought professional advice with regards to our statutory obligations and as a director I take these obligations seriously.”

He added: “The loan application was made in good faith, and the information provided, including the company's turnover forecast, was accurate and properly based. I will provide the documents that demonstrate this to the Party's process.

"I will continue to work hard every day representing my constituents while this party process is ongoing."

The government’s business department introduced a “dissolution objections process” during the pandemic to prevent businesses from misusing the loans and closing down the businesses while bounceback repayments were outstanding.

“Perran Moon MP has referred himself to the Labour Party so that these matters can be investigated in line with the Party's rules,” a spokesperson for the Labour Party told The Independent.

“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."