Second Labour MP Suspended Over Covid Loan Repayments

A second Labour MP, Perran Moon, has been suspended from the party after voluntarily referring himself for investigation into Covid loan repayments. Moon, the MP for Camborne and Redruth, is a co-director of a training company called Autoswot, which received a Bounce Back Loan during the pandemic.

Bounce Back Loans, government-backed loans of up to £50,000, were made available to small businesses to help them through the pandemic. A government report later indicated that the scheme was susceptible to fraud and error. A total of £46 billion in these loans was issued when the scheme launched in May 2020. Taxpayers' money provided a 100% government guarantee for each loan, meaning public funds would cover repayments if companies defaulted. The Covid counter-fraud commissioner estimated that fraud and error within the scheme could total up to £2.8 billion.

Autoswot was established in June 2019, a year before the loans became available, and had projected revenues exceeding £200,000 at that time. Moon stated that he applied for the maximum loan amount of £50,000 in compliance with the rules, sought professional advice regarding its obligations, and has committed to providing documentation to the Labour Party's investigation.

He explained that the loan was utilized for essential business expenses, including staffing, during the pandemic. Partial repayments were made until the company ceased trading in late 2022. Moon indicated that he had received written assurances from Companies House that no accounts needed to be filed after the company applied to be struck off, although this guidance was later found to be incorrect.

Moon, who was elected in 2024, attributed the business's closure to unforeseen external market pressures and stated that it occurred despite the efforts of its staff. He emphasized his cooperation with the party's investigation process, asserting that the loan application was made in good faith with accurate and properly based information, including the company's turnover forecast.

A Labour Party spokesperson confirmed that Moon had referred himself for investigation, stating that the party upholds high standards for its representatives and has robust processes in place. The party declined to comment further while the investigation is ongoing.

This is the second investigation the Labour Party has initiated concerning these loans. In August, Labour MP Bayo Alaba was suspended after questions arose about a Covid-era loan made to a real estate company. Alaba stated at the time that there had been no attempt to avoid financial obligations and that he was committed to meeting the liability in full. A third MP, James McMurdock, who now sits as an independent, resigned from Reform in 2025 after inquiries into loans totaling £70,000 given to two fitness companies. McMurdock maintained that his business dealings were compliant with the rules.