New analysis by finance maven and left activist Esther Giles (The Forensic Socialist/@VoteEsther) shows that the Labour party’s finances are about to take an even bigger hit than has so far been seen under the disastrous regime of Keir Starmer and David Evans.
The party has been flirting with bankruptcy since not long after the pair took over, laying off hardworking staff and even failing to mount a campaign worth the name in the recent North Shropshire by-election – with the party’s catastrophic fall allowing the LibDems to leapfrog it and take the seat from the Tories – despite sending begging letters to members and even expelled members asking for funds.
But Ms Giles’s analysis of Labour’s financial reports shows that so far the ‘big hit’ from the exodus of hundreds of thousands of members has not even been reflected – and that this will bite in 2022.
Ms Giles’s chart of Labour’s income shows that, so far, the party has continued to report an increase in membership fees received:
As the chart makes clear, the big loss shown so far in Labour’s woeful financial position is in donations from members and unions, not in membership fees.
However, with membership numbers having fallen by around 200,000 or more since Starmer became leader, the party is set to take a hit of around £6 million when its membership dues are properly reflected – a situation already reflected in the party’s persistent emails pleading for cash.
This will land in the middle of an unfolding financial disaster for the party: its total income fell from the 2019 high under Jeremy Corbyn of almost £60 million to just over £40 in its first year under Starmer. The £6m fall in membership income will reduce that to just £35m – more than £20m down on 2019.
Meanwhile, the party has continued to haemorrhage cash in needless settlements and the legal costs incurred in its hounding of members and its (anything-but-)independent complaints process designed to hound out even more.
Labour’s widely-condemned sacking of staff to try to reduce its losses, meanwhile, has at best broken even with its profligacy on legal costs – the three waves of redundancies have just about balanced out the £2m a year legal expenses admitted by a right-wing National Executive Committee member.
On top of this comes a reduction in union funding. The Bakers’ Union has withdrawn all funding and has disaffiliated from the party after Labour’s foolhardy treatment of the union’s president, while Unite intends to reduce donations to the minimum consistent with affiliation, a CWU special conference has voted to do the same and the GMB is reviewing all its funding of the party. The party could also see huge fines as a result of its latest massive data breach.
As a result of political foolishness and the prioritisation of a factional war over real opposition, the party’s reserves are now at their lowest level since 2014 – while it faces a likelihood of an early general election as soon as the collapsing Boris Johnson is replaced and a new Tory leader seeks to capitalise on the usual popularity ‘bounce’ and ‘honeymoon period’.
Ms Giles told Skwawkbox:
I find it shocking that NEC members appear to be oblivious or deliberately ignorant to what’s going and that the treasurer, who took a lot of credit for restoring party finances under Jeremy Corbyn, won’t do the reverse.
However, it’s clear from the areas in which Labour has seen such falls in its funding and such increases in its costs that the fundamental responsibility for its financial situation, which is already disastrous and about to get worse, lies with its political and administrative ‘leadership’.
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