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LONDON – Britain’s Labor Party is asking its employees to accept wage cuts on real terms as it deals with a loss of more than 3 million pounds sterling due to declining membership and reduced support for trade unions.
Declining income from two traditional sources will increase pressure on Labor leader Keir Starmer to attract large donations as he seeks to cash in on Boris Johnson’s trouble in the polls.
Labor workers were briefed on the financial situation of the opposition parties at a meeting last week with leading figures in the party. They were offered a 2 per cent wage increase for the next year – a reduction in real terms when inflation is taken into account.
Party managers will see their salaries freeze, while all employees agree to a 3 per cent increase next January.
Party general secretary David Evans, director of human resources, Martin Beecroft, and party chief financial officer Simon Mills told staff they expected to make up for some of the shortfall with large donations, but gave no further details.
They determined that an estimated £1.6m was lost from union contributions and £1.5m from member fees last year.
Employees were told the drop in membership was much higher than expected, while potential fines from a security breach in November and the loss of union contributions caused “significant” additional costs.
The big labor union, once Labor’s biggest funder and a staunch supporter of Starmer’s left-wing predecessor Jeremy Corbyn, announced last year that it would cut political donations to the party and funnel money to union campaigns.
Worker membership peaked in January 2020 at more than 500,000, but figures presented to employees last week suggest it has since been declining.
Labor already shed 80 jobs in a bid to cut costs last year, as it tried to make up for exorbitant salaries in legal cases related to a long-running scandal over its handling of anti-Semitism complaints, and the cost of running three general elections since then. 2015.
The party also lost £1m in annual “short” funding – an amount of state money earmarked for the opposition – after losing seats in the 2019 election.
One of the officials who lost their job accused the party of “speaking a good game of workers’ rights while senior officials treat Labor staff with contempt and mess up party resources”.
They added that the argument that jobs should go to make the party “fit to fight” for elections has been shown as a “lie”.
A Labor spokesperson said: “We have been open about the challenges the party faces. The party staff have done an amazing job addressing these challenges and everyone is focused on ensuring we are ready to run in the next general election.”