Labour funding crisis: Biggest union slashes donations in fury at Keir Starmer leadership

Keir Starmer savaged over Labour reshuffle

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Unite’s general secretary Sharon Graham said she feared she was not “getting the best value for” money from Labour. The union will still pay £1million in affiliation fees to the party but would not reveal how extra funding that it usually gives would be held back.

Ms Graham’s predecessor, Len McCluskey, who stepped down in August, had already reduced the amount Unite paid to Labour following Sir Keir’s election as party leader in spring 2020.

The decision to cut funding risks creating a hole in Labour’s general election finances.

Ms Graham told The Guardian: “The fact that I am being quite robust is because Labour needs to talk about workers, needs to defend workers and needs to defend communities.”

Taking aim at Sir Keir for being too focused on changing internal party rules, she said Labour needed to focus on the issues impacting workers.

She said: “I don’t know what world they’re living in, but they don’t live in the one in I’m living in, because in the one I’m inhabiting, people are frightened.

“They feel that they don’t know what’s happening next.

“They are angry. They are in pain.

“And the idea that the politicians can’t get their act together and start talking about what to do about it I find outrageous.”

The latest move risks deepening the divide between Unite and Labour leader Sir Keir Starmer.

Although a Labour source said: “Relationships with the unions are good.

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“Unions have always funded campaigns and causes for their memberships.”

The new cut in financial support risks Labour being forced to make tough decisions on spending in the run up to the next election.

The Opposition party already often raises less money than the Conservatives ahead of elections and is already thought to have been struggling.

Earlier this year Labour announced around 80 members of staff were taking voluntary redundancy amid claims of financial strains.

Costly legal battles following allegations of anti-Semitism and three general elections in six years have badly dented party coffers.

The extent of Labour’s loss at the polls in 2019 under Jeremy Corbyn also led to reduced funding.

Opposition parties receive public funding known as “short money” to help run their day-to-day activities.

The exact amount is calculated based on how many seats the party has won.

Labour said the voluntary redundancies would help the party “get a grip” on its finances and restructure internally ahead of the next election.

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