Starmer asks staff to take a pay cut as cash runs dry: It doesn’t leave us much hope for the economy or workers in Labour’s hands.

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Labour exodus in protest at suspension of Jeremy Corbyn

Labour talk a good game about workers’ rights but they cut, cut, cut! Just like the Tories.

Labour Party is asking its own staff to accept a real-terms pay cut as it deals with the loss of more than £3 million to falling membership and reduced trade union support.

The decline in income from two traditional sources will increase pressure on Labour leader Keir Starmer to attract big donations as he seeks to benefit from Boris Johnson’s trouble in the polls.

Labour staff were briefed on the state of the opposition party’s finances at a meeting last week with senior party figures. They were offered a 2 percent pay uplift for next year — a real-terms cut when inflation is factored in.

Directors in the party will see their pay frozen, while all staff are in line for an increase of 3 percent next January.

The party’s general secretary David Evans, its human resources director Martin Beecroft and finance chief Simon Mills told employees they expect to make up some of the shortfall from large donations, but did not give further details.

They specified that an estimated £1.6 million had been lost from union contributions and £1.5 million from members’ fees in the last year.

Staff were told that the decline in membership has been much higher than expected, while potential fines from a security breach in November and a loss of union contributions have caused “substantial” additional costs.

The large trade union Unite, which has previously been Labour’s biggest funder and was a staunch supporter of Starmer’s left-wing predecessor Jeremy Corbyn, announced last year it would cut political donations to the party and divert the money to union campaigns.

Labour membership under Jeremy Corbyn witnessed a reversal of the Brown, Blairite era but soon started a downward curve when Sir Keir Starmer took over the Party. It is estimated the Labour Party have lost well over 150k members due to Starmer’s rightward direction leaving Left-wingers and socialist out in the cold.

Labour Party membership

Starmer is reversing Labour’s fortunes real time

Financially the party moved into surplus under Corbyn after his 2015 restructuring plan, clearing more than £25m of debts built up from Corbyn’s predecessors Blair, Brown and Miliband.

Page 65 of the party’s own annual report shows that at the end of 2019 – after a massive December general election campaign and widespread local elections earlier in the year – the party had almost total assets of almost £32 million, including more than £27 million in its bank accounts.

And of that £27m, £13.5 million were reserves.

It is hard to imagine how a party that was created to represent workers interests can be so incompetent with its own workers never mind the financial day to day business of running a political party, hardly an endorsement for running an economy.

Labour already shed almost 80 jobs in a bid to cut costs last year as it tried to compensate for expensive payouts in legal cases relating to a long-running scandal over its handling of anti-semitism complaints.

The party also lost £1 million of annual “short money” funding — a pot of state money allocated to the opposition — after it lost seats at the 2019 election.

In October 2020, Labour’s main union backer, Unite, voted to cut its funding to the party. And, in December 2021 – under new General Secretary Sharon Graham the union further announced it would cut all political donations to Labour, with Graham deriding Starmer’s rightward shift.

In addition, the Communication Workers Union (CWU) voted in November to suspend all donations to Labour – with the union’s General Secretary, Dave Ward, stating that under Starmer’s leadership, the party was “failing to connect with working-class communities”.

And, in September, the Bakers’ union (BFAWU) – one of the Labour Party’s founding union members – voted to disaffiliate from the party entirely.

One staff member who lost their job accused the party of “talking a good game about workers’ rights while senior officials treat Labour staff with contempt and tank the party’s resources.”

They added that the argument that jobs had to go to make the party “fighting fit” for elections had been shown up as “a lie.”

A Labour spokesperson said: “We have been open about the challenges the party faces. Party staff have done great work to tackle these challenges and everyone is focused on ensuring we are ready to fight the next general election.”

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