Second Labour MP Suspended: Perran Moon Referred Over £50,000 Covid Loan

Photo: ©House of Commons / Laurie Noble, via Wikimedia Commons (CC BY 3.0)

Two months after Andy Burnham took office promising cleaner government, Labour has a second MP sitting as an independent over a Covid loan. Perran Moon, the MP for Camborne and Redruth in Cornwall, has been suspended from the party after voluntarily referring himself for investigation over a £50,000 pandemic Bounce Back Loan taken out by a company he co-directed.

The suspension, confirmed on Monday evening, makes Moon the second Labour MP in recent weeks to face party action over taxpayer-funded pandemic borrowing. The first was Bayo Alaba, the MP for Southend East and Rochford, who referred himself to party officials back in August after a newspaper approached him with questions about a Covid-era loan given to one of his businesses.

Moon, first elected in 2024 after a career in communications and marketing, sits on the opposite end of the country from Westminster — but this row is landing squarely on the Prime Minister's doorstep.

The Autoswot loan: what the Perran Moon suspension is about

At the centre of the case is Autoswot Limited, a start-up training company Moon co-founded in 2019 that was aimed at the automotive sector. During the pandemic it applied for — and received — the maximum £50,000 Bounce Back Loan, the government-backed scheme that helped small firms survive the first lockdowns with a 100 per cent Treasury guarantee.

Moon's defence, laid out in a statement to constituents, is that the loan was taken in good faith, that the business made repayments until it ceased trading in late 2022, and that professional advice was sought throughout. "When the company took out the loan, it fully intended to repay it," he said. He blamed "unforeseen external market pressures" for the company's collapse despite staff efforts, and insisted the turnover forecast underpinning the application — a figure above £200,000 — was "accurate and properly based". He has promised to supply documents to the party's investigators to prove it.

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There is one detail that could prove awkward for the official machinery, not just for Moon: according to the BBC, Companies House repeatedly told him in writing that no further accounts were needed after the firm applied to be struck off — advice that turned out to be wrong. If that account holds, the paper trail becomes a story about a confusing bureaucracy as much as about one MP's judgment.

Why a second suspension matters for Labour

Some £46 billion was paid out in 2020, and government auditors estimated fraud and error at up to £2.8 billion. The scheme was built for speed — money out the door first, checks later — so cases like this were always going to surface. The question for Labour is whether two of its own MPs getting caught in the net looks like the system working, or like a party that failed to vet its recruits.

Labour's spokesman offered the standard formulation: Moon "has referred himself to the Labour Party so that these matters can be investigated in line with the party's rules," adding that the party "expects the highest standards from our elected representatives and we have robust processes in place to ensure those high standards are upheld." It declined to comment further while the investigation runs, which is expected to take weeks.

Moon will keep his seat and his salary while the process plays out — suspension from the party is not suspension from Parliament — and he says he will "continue to work hard every day representing" his constituents in the meantime. That is his right, and constituents in Camborne, Redruth and Hayle deserve continued representation. But the optics are rough: an MP elected on a clean-government pitch now explaining himself to party investigators over a taxpayer-backed loan that was never fully repaid.

My own read: this is not yet a scandal in the usual sense. Nobody has accused Moon of a crime, and self-referral is exactly what you want a person in his position to do. But it is a problem of accumulation — the second case, not the first — and Burnham's government is young enough that every one of these lands on his ledger. The investigation should be quick, public in its outcome, and consistent with whatever fate befell Bayo Alaba.