The Opposition party is facing financial ruin with the party treasurer’s report, logged with the electoral commission, showing it is operating at a significant loss. It recorded a £4.8million deficit, caused by costs of staff redundancies, a drop in membership subscriptions, and ongoing legal battles.
In total more than 91,000 Britons ripped up their membership cards last year.
Membership stood at 432,213 at the end of 2021, down from 523,332 the year before.
Labour saw the money raised from subscriptions drop by over £3million as a result of the exodus, with the party raising about £16.1million in fees last year, compared with £19.3million in 2020.
The new accounts have been published at the same time Sir Keir has been warned of further financial blows in the months ahead.
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Co-chair Hilary Schan said: “These figures are alarming. Keir Starmer’s pledge-breaking and factional approach has prompted an exodus of Labour members and a financial crisis for the party.
“Yet the leadership has welcomed these departures while actively alienating Labour’s affiliated trade unions, which give millions to the party.”
The report filed by Labour admitted 2021 had been a “difficult and demanding” year but said the party remained hopeful that a return to normal campaigning activists and a fully in-person annual conference post-Covid would see the finances return to normal.
It added that the majority of the money loss was due to the one-off cost of the redundancies that would not be repeated in future years.
“The action taken by the Party to manage costs included reverting to the more traditional mid-election cycle model, after years remaining on an election-footing,” it said.
“The one-off cost of the voluntary severance scheme contributed to the deficit result which required the allocation of cash reserves to fund.”
Last year Labour raised £45million in donations according to the report.
The figure is far higher than the conservatives who brought in about £31million.