You will probably not know this, and it’s not your fault if you don’t as it is a rarely reported fact, but the largest annual income the Labour Party has ever achieved was in 2017 when Jeremy Corbyn was the leader of the party.

Corbyn tripled Labour’s membership to almost 600,000 members, making Labour the largest political party in western Europe. During his tenure a highly successful funding model developed with unions, members and a very large number of small amount donors contributing to the party. As a result of the generosity of all those groups, by 2018 Labour was richer than the billionaire/millionaire/corporation funded Tory party.

An additional and important benefit of Labour’s accounts being in such rude health was that it protected the party from the inevitable corruption caused by political parties taking money from wealthy people and corporations. This type of corruption has been noticeably prevalent during the Covid pandemic. Hugely profitable contracts worth billions of pounds seem to have been arbitrarily awarded with little, if any, scrutiny to friends of Tory ministers and to Tory donors. Political parties are not charities, wealthy donors and corporations expect a return on their investment.

Despite having to raise enough money to cover the party’s running costs as well as to pay for two general election campaigns in two years, Jeremy Corbyn raised sufficient funds during his tenure to leave Labour’s accounts in good order when he stood down as leader.

An example of Corbyn’s exceptional fundraising abilities happened during the second leadership contest when Corbyn was challenged by Owen Smith. During the first leadership contest in 2015 supporters could vote in the contest for the price of a coffee - £3. For the second contest that amount was increased by opponents of Jeremy Corbyn on the NEC to £25 to try to discourage people from voting for him, and a window of just 48 hours was allowed to register support.

183,541 new supporters signed up despite the £25 fee and the limited amount of time allowed to register, raising £4,588,525 for Labour. It is safe to say, and the result of the contest bears this out, that those people were not signing up to vote for Owen Smith. Corbyn raised the lion’s share of £4.5m for Labour in just 48 hours. That is probably the largest amount of money ever raised by any British politician in that period of time.

Unfortunately, the state of the party’s finances has badly deteriorated since Keir Starmer became leader 16 months ago. More members have left since Starmer became leader (c150,000) than in any other year in the party’s history. That huge drop in membership has lost Labour an estimated £4 million a year in membership fees, a total of £20 million over the next five years. In addition, as a result of Starmer’s shift to the right, Unite has decreased its funding to the party by a million pounds a year. 

Another reason for Labour haemorrhaging funds is because Keir Starmer has decided to not challenge legal cases fought against the party, even cases where Labour’s lawyers advised the party would win. Labour had to pay almost a million pounds on one case alone and Starmer has left Labour open to so many legal challenges that 20% of the party’s funds have allegedly been set aside for further potential legal costs. 

The legal costs incurred by Keir Starmer’s decision to not defend Labour’s reputation may explain recent reports that Labour is struggling to even meet its payroll commitments. The acting general secretary, David Evans, is making 90 permanent members of staff redundant. At the same time as he is making staff redundant, he is hiring temporary agency workers to carry out investigations into Labour members. 

People who closely follow Labour politics will be aware that the most likely reason investigators are being hired is to enable Starmer to misuse Labour’s disciplinary process to influence the selection of delegates for Labour’s Conference in September. This is in order to give him the numbers he needs to force through democratically regressive rule changes which benefit his faction of the party.

Internal party machinations aside, the fact that Labour is laying off staff while hiring temporary agency workers is not the behaviour one would expect from a party that is supposed to represent the interests of the working class. Indeed, it is the type of behaviour one would expect from the bad bosses the Labour Party was founded to fight.

I began by asking will Keir Starmer bankrupt Labour? If he continues to lose Labour money at the current rate, the answer is yes. I would go further and say that if Starmer keeps losing money at this rate he will bankrupt Labour within months.

Labour cannot financially afford to allow Keir Starmer to continue leading the Party.