Labour MP Joani Reid has stepped down from the party after her husband was arrested on suspicion of spying for China.
In a statement, Reid said she was “voluntarily suspending herself” from the Labour party while an internal investigation was carried out.
Taylor, a businessman and former Labour adviser, was one of three men arrested on suspicion of assisting a foreign intelligence service on Wednesday.
The East Kilbride and Strathaven MP said she was not personally under investigation by police and had done nothing wrong, but said she would “not sit as a Labour MP” until the probe was concluded.
The Labour Party described the allegations as “incredibly serious” but said Reid was “co-operating fully” with the investigation.
It is understood that both Reid and Taylor have been administratively suspended.
Reid said she had taken the decision to temporarily stand down to avoid becoming a “distraction” for the government.
She also said it was to protect her children from “intrusion”.
“This week has been the worst of my life. The shock of recent days has been difficult for me and my family,” Reid said in a statement.
“I am not under investigation by the police and no accusations have been against me. I have done nothing wrong.
“I am voluntarily suspending myself from the whip and will not sit as a Labour MP until internal investigations are concluded. I will welcome and co-operate with any questions and worries the party may have.”
Taylor was arrested in London and has since been released on bail.
Matthew Aplin, 43, and Steve Jones, 68, have also been bailed after being arrested in Wales.
Counter-terrorism police have searched properties where the men were arrested as well as others in Cardiff, East Kilbride and London.
Joani Reid’s grandfather Jimmy Reid was a famed trade unionist [Getty Images]
Following Taylor’s arrest, Reid, elected to the East Kilbride and Strathaven seat in 2024, said she had never been to China, nor spoken on any China-related matters in the House of Commons.
Taylor, a former advisor to Welsh Labour politicians, ran as the party’s candidate to become North Wales police and crime commissioner.
On Thursday, The Herald newspaper reported Reid’s consultancy company, Reid Strategy Limited, had received more than £23,000 in interest-free loans from two of Taylor’s businesses.
Taylor, meanwhile, was paid more than £600,000 by a now-wound up construction firm, Moblake, in the form of an interest-free loan with no repayment terms and paid a further £300,000 in dividends and £30,000 in an interest-free loan by PR and communications consultancy Earthcott since 2021.
There is no suggestion of any wrongdoing by either spouse in relation to these transactions reported to Companies House.
Reid was born in Glasgow and is the granddaughter of famed trade unionist and journalist Jimmy Reid.
She has spent most of her career in London but moved to East Kilbride in 2022.
The other men arrested have both spent time as political advisers.
Jones is a former Welsh government special adviser and Aplin was previous a Labour press officer.
All three have been bailed to a date in May and inquiries remain ongoing.