Rishi Sunak said it was “absolutely right” that Tory peer Baroness Michelle Mone was taking a leave of absence from the Lords following allegations linking her to a firm awarded contracts for personal protective equipment (PPE).

The Prime Minister said he was “shocked” to read reports alleging that the peer and her children secretly received £29 million originating from the profits of the PPE firm – claims she has denied.

His press secretary confirmed Lady Mone had lost the Tory whip but clarified this only happened “by default” when she decided to take a leave of absence.

She suggested Mr Sunak had not cut the peer adrift, saying: “I wouldn’t characterise it as that.”

At Prime Minister’s Questions, Mr Sunak said: “Like everyone else I was absolutely shocked to read about the allegations.

Lords standards
Baroness Michelle Mone (Stefen Rousseau/PA)

“It’s absolutely right that she is no longer attending the House of Lords and therefore no longer has the Conservative whip.”

Lady Mone’s spokesman said she was taking a leave of absence from the House of Lords “in order to clear her name of the allegations that have been unjustly levelled against her”.

Downing Street said her decision meant she automatically lost the Tory whip.

The Prime Minister’s press secretary said: “She’s taken a leave of absence therefore, by default, she has not got the Conservative whip any more.”

Ministers have committed to release documents to MPs surrounding the award of contracts to the PPE Medpro firm.

Reports – denied by Lady Mone – have suggested the peer may have profited from the firm winning contracts worth more than £200 million to supply equipment after she recommended it to ministers in the early days of the coronavirus pandemic.

In a reference to an investigation by the Guardian, Labour leader Sir Keir Starmer asked: “How did his colleague Baroness Mone end up with nearly £30 million of taxpayers’ money in her bank account?”

Mr Sunak told him: “The one thing we know about him is he is a lawyer, he should know there is a process in place. It is right that that process concludes. I hope that it is resolved promptly.”

The Lords’ standards watchdog is investigating Lady Mone over her alleged involvement in procuring contracts for PPE Medpro, although this has been paused “while the matter is under investigation by the police or another agency as part of a criminal investigation”.

Lady Mone has consistently denied any “role or function” in the company, and her lawyers have previously said she is “not connected to PPE Medpro in any capacity”.