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Is Keir Starmer going to bankrupt Labour ...

Is Keir Starmer going to bankrupt Labour?

Jul 20, 2021

You probably won't know this, and it’s not your fault if you don’t as it is rarely reported fact, but the largest annual income Labour has ever achieved was when Jeremy Corbyn was the leader of the party. Corbyn achieved the party's top three highest annual incomes in Labour's history in 2017, 2018 and 2019.

Corbyn also tripled Labour’s membership to almost 600,000 members, making it the largest political party in western Europe. During his stewardship of the party a highly successful funding model was developed with unions, members and a very large number of small amount donors contributing to the party. As a result of their combined generosity Labour was able to raise more money than the Tories.

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. Huge contracts seem to have been arbitrarily awarded with little scrutiny to Tory ministers' friends and Tory donors. Political parties are not charities, wealthy donors and corporations expect a return on their investment and it looks like the Tories have delivered them a healthy.

Corbyn not only raised enough money to cover the party’s running costs and pay for two general elections and local election campaigns, he raised enough to leave Labour’s accounts in good order when he stood down as leader, leaving Keir Starmer £13.5m in cash reserves.

An example of Corbyn’s exceptional fundraising abilities happened during the second leadership contest when he 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. At 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, with a window of just 48 hours allowed for people register their 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 48 hours.

Unfortunately, the state of the party’s finances has badly deteriorated since Keir Starmer became leader. More members have left since Starmer became leader (c200,000) than in any other year in the party’s history. The 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. Unite has also decreased its funding to the party by a million pounds a year because of Keir Starmer shifting the party right.

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. Under Corbyn's leadership Labour's legal costs were c£200,000 a year, under Starmer they have increased by 1,000% to £2 million a year.

The legal costs incurred by Keir Starmer’s decision to not defend Labour’s reputation may explain recent reports that Labour is struggling to 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, Labour 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 Labour was founded to fight and defeat.

I began by asking will Keir Starmer bankrupt Labour? If he continues to lose Labour money at the current rate, the answer is yes.

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

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