After Squandering His Inheritance, Keir Starmer Now Has to Ask Rich Donors to Bail Him Out

Since becoming Labour leader two years ago, Keir Starmer has deliberately cratered the party’s finances by antagonizing its members and union allies. Now he’s asking business tycoons to plug the gap and lock in the party’s status as capital’s B team.

Labour Party leader Keir Starmer at Westminster Abbey in London on March 29, 2022. (Daniel Leal /AFP via Getty Images)

As they prepare to enter their third year in command of the British Labour Party, Keir Starmer and his team are keen to present themselves as an alternative government-in-waiting.

For much of 2021, this prospect would have seemed far-fetched. In almost two hundred opinion polls conducted between the end of January and the start of November, Starmer’s party had the lead in just one. Two high-profile by-elections during that period saw Labour lose one seat to the Conservatives and come within a hair’s breadth of losing another.

Reviewing Starmer’s first in-person conference speech as leader in September 2021, the Guardian’s Aditya Chakrabortty described him as a figure “auditioning for the role of red-faced, purse-lipped manager, perennially disappointed in us, his ungrateful customers.” Chakrabortty found it impossible to imagine Starmer “ever commanding a surge of enthusiasm or interest, even from the ground troops who will eventually go door-knocking for him.”

As the year drew to a close, however, Boris Johnson squandered the Tory polling lead with two self-inflicted blows. First, he tried to change the rules on corporate lobbying to protect his ally Owen Paterson from suspension as an MP, managing only to ignite a political firestorm about cronyism and corruption. Then, Johnson’s private disregard for the rules on social gatherings he laid down in public caught up with him as the “partygate” scandal gathered momentum. By the end of March, the Tories hadn’t led a poll since early December.

Setting Fire to Everything

Yet even as they sought an opportunity to govern the British state, Labour’s top figures were keen to advertise their inability to run their own party. As a story in the Sunday Times reveals, Starmer’s self-styled “new management” team have managed to squander the buoyant finances that Jeremy Corbyn bequeathed to them on stepping down as leader. They are now keen to solicit big contributions from “high-value donors” through “Zoom calls and coffee meetings” in order to plug the gap.

Not for the first time, Team Starmer tried to shift the blame for their own failings onto a familiar scapegoat. One anonymous source assured the Sunday Times reporters that it was all the fault of Corbyn and his associates: “They set fire to everything.” But the evidence is there in plain sight for anyone prepared to take a look.

The most obvious reason for Labour’s financial difficulties is the loss of income as the party membership contracts. After rising dramatically under Corbyn, from less than 200,000 in 2015 to 550,000 at the time of the 2020 leadership election, Labour’s membership has now dropped to a little over 400,000.

If the departed members had been paying the standard rate of £4.67 a month, that would be a loss of more than £8 million a year. Even if they were all paying the reduced rate of £2.34, Starmer’s party would have an annual shortfall of over £4 million to make up for.

Starmer and his allies chose to do without this income stream just as surely as if they had taken the cash out of an ATM and set fire to it. In January 2022, Labour’s shadow chancellor Rachel Reeves told the Financial Times how pleased she was to see declining levels of participation in the Labour Party:

Reeves said that a drop in Labour membership, which has reduced the party’s income, was a price worth paying for shedding unwelcome supporters and removing the “stain” of anti-Semitism from the party. “Membership in my constituency is falling and that’s a good thing,” she said. People had left “who should never have joined the Labour Party. They never shared our values,” she added.

Their Values and Ours

In the idiom of the Labour right, charges of antisemitism perform a similar role to charges of electoral fraud in the lexicon of the US Republican Party. Reeves does not actually believe that most of the people who have canceled their membership are hate-filled antisemites, just as Donald Trump does not actually believe that personation was rampant during the 2020 presidential election. In both cases, it is a code word — a way of indicating that certain types of people have no right to be involved in the political process.

We can get a clear picture of the reality underpinning such rhetoric from a statement by one of those Labour members who has decided to resign from the party, David Rosenberg. Rosenberg is a left-wing Jewish historian who organizes walking tours about London’s Jewish history and educational trips to Auschwitz. He has also been strongly critical of efforts to conflate opposition to antisemitism with support for Israel. The indictment of Jeremy Corbyn and his supporters drawn up by their critics relies overwhelmingly on that conflation.

Rosenberg had observed multiple cases of Jewish party members facing disciplinary action for

Expressing non-Zionist/anti-Zionist positions; being critical of the treatment of Palestinians by the Israeli army, settlers, courts, and government; and openly criticizing the views of right-wing Jewish bodies in our community that define themselves as community “leaders” and claim to express the voice of the community.

Yet there had been no action taken against him for saying the same things:

I then discovered through informal sources that something worse was happening. Non-Jewish left-wing Labour members were being accused of antisemitism if they “liked,” shared or retweeted certain social media posts that I had written . . . . The most bizarre instance I saw on a charge sheet of a member with a decades-long record of antiracist and anti-fascist work, concerned a Facebook post with a photo of myself and Jeremy Corbyn holding a copy of the new edition of my book Rebel Footprints at its launch event. In the post I described Corbyn as “a rebel I have always been so proud to work and campaign with.” I added “Solidarity with you against the haters, the ignoramuses and the tukhes-lekers (arse-lickers) of the wealthy.” It seems that this non-Jewish member was being condemned for antisemitism for sharing a post that included a Yiddish phrase!

This discovery was a tipping point for Rosenberg, who went on to cancel his membership. He also noted a small but revealing episode that took place earlier this year in a north London constituency, Hornsey and Wood Green.

Right-wing members of the local Labour branch, including the MP Catherine West, set out to disrupt a talk arranged to coincide with Holocaust Memorial Day. The speaker, Sue Levi Hughes, was the daughter of refugees from Nazism, and had lost close relatives in the death camps. She was due to speak about the experience of Jewish women during the Holocaust. West and her allies tried to prevent Hughes from speaking because she had previously referred to Israel as an apartheid state in a social media post. When this effort failed, there was a walkout during her presentation.

This is what Rachel Reeves is actually referring to when she talks about cleansing the Labour Party of a “stain” and driving out those who “never shared our values.” When many of those she slanders so casually were organizing to oppose racism in British society, she was busy channeling the spirit of Enoch Powell, claiming there would be “riots” as a result of “bubbling tensions” if immigration to Britain was not curtailed.

A Price Worth Paying

Reeves gave us another sample of her political values back in 2013. While serving as part of Ed Miliband’s front-bench team, she promised that a Labour government would be “tougher” than the Conservative Party in dealing with those on benefits. This was at a time when the Tories were quite literally hounding people to their deaths after wrongly declaring them to be fit for work.

Labour’s shadow chancellor knows perfectly well that much of the party membership finds that kind of social sadism repugnant. In order to win their votes, Starmer had to assure them that he would stick to a policy platform well to the left of Ed Miliband’s leadership. This included a pledge to “abolish Universal Credit” and end the “cruel sanctions regime” whose severity Reeves had vowed to exceed.

Since becoming leader, Starmer has gone out of his way to advertise his contempt for the members who took his Ten Pledges at face value. He has shifted the party’s center of gravity to the right of where it lay under Miliband, let alone Corbyn. This creates an obvious problem of credibility for anyone who plans to embark on an equally cynical leadership campaign in the future.

At last year’s party conference, Starmer’s allies tried to change the system for electing a leader: they failed in that endeavor, although they did manage to raise the threshold for getting onto the ballot paper in the first place, making it harder for any Corbyn-style outsider to prevail against the majority of Labour MPs. In the meantime, depressing the membership figures is another safeguard against the possibility of a left-wing restoration. That is why Reeves is so pleased to see her local party shrinking, and why she considers the loss of £4 million, £8 million, or whatever the full sum may be “a price worth paying.”

Forensic Accounting

The Sunday Times article uncritically repeated the claim that “legal bills arising from antisemitism lawsuits, disciplinary cases and data protection breaches” were a major cause of the party’s financial difficulties. In reality, this is another example of Starmer’s leadership choosing to forfeit large sums of money for the sake of gaining an advantage over its left-wing opponents.

The most high-profile legal expenditure under Starmer’s watch came in July 2020, when he ordered the payment of a reported £600,000 to settle a libel action. According to the Guardian, £180,000 of that sum went directly in damages to the BBC journalist John Ware and seven former Labour officials who had appeared as star witnesses in his Panorama documentary “Is Labour Antisemitic?” Corbyn strongly criticized the settlement, as did the general secretary of the Unite trade union, Len McCluskey, who described it as “a misuse of Labour Party funds to settle a case it was advised we would win in court.”

First broadcast in July 2019, Ware’s program asserted that Jeremy Corbyn and his allies had deliberately thwarted efforts by the former officials to root out antisemitism in the party membership. It dominated the news agenda for several weeks during the summer of 2019, when Corbyn’s leadership was trying to respond to the fresh challenge that Boris Johnson represented as prime minister. During the election campaign later that year, journalists repeatedly demanded that Corbyn apologize for the failings that Ware claimed to have uncovered.

There have been several detailed critiques of the Panorama documentary, drawing upon a wealth of evidence in the public domain that most British journalists have decided to ignore. Those critiques have reduced “Is Labour Antisemitic?” to a pile of journalistic rubble. But the most striking assessments came from two sources that cannot possibly be accused of partiality toward Corbyn and his allies.


The first was the report of the Equality and Human Rights Commission (EHRC) on antisemitism in the Labour Party that appeared in October 2020. Assessing the claims made in the Panorama documentary should have been at the very top of the EHRC’s agenda. Instead, the authors of the report chose not to mention the program’s existence, while quietly rejecting its version of events.

The EHRC clearly strained every sinew to find negative things to say about Labour’s record under Corbyn. Ian Acheson served as the Commission’s chief operating officer between 2012 and 2015. In November 2020, Acheson boasted that its investigation of Labour was the fruit of a long-term effort by the Tories to co-opt the EHRC through “the stealthy introduction of commissioners who don’t regard a Conservative government as a travesty,” as he delicately put it.

The Commission investigated Labour for the same reason it has categorically refused to examine racism in the Conservative Party, despite multiple requests to do so. In both situations it was following the logic of power rather than the logic of evidence. The LGBT organization Stonewall recently launched a blistering attack on the EHRC’s evident political bias and identified its source:

The government is involved in appointing EHRC commissioners, ministers hold annual reviews with the chair, the government controls EHRC funding, and it has no independent relationship with parliament. The risk this creates — that the EHRC will not act to promote and protect the rights of all its citizens, but instead will be swayed by personal whims and the politics of the day — has now become a reality.

This makes the EHRC’s decision not to repeat any of the Panorama allegations all the more revealing. If the report on Labour had made specific, testable claims about named individuals who went on to challenge its findings in the courts, it would have drained credibility from the whole exercise, even for the most inattentive sections of the British press. One has to read between the lines to uncover the Commission’s verdict on Panorama’s journalism, but it is a damning one.

John Ware himself then declined to follow through on an explicit vow to sue Corbyn as an individual after the former Labour leader repeated his original criticisms of the documentary. If Ware’s threatened libel suit had come before the courts, Corbyn would certainly have mounted a robust defense. That defense would have drawn heavily on the material contained in a leaked report on the party’s internal culture between 2015 and 2019 that Starmer was anxious to bury.

Ware’s political hostility to Corbyn and his supporters is a matter of public record. The bias of English defamation law in favor of plaintiffs is also well known, giving rise to the phenomenon of “libel tourism.” Since Ware decided not to try his luck in court, we can only wonder if there was something about the prospect of having his documentary held up to close scrutiny by trained professionals that gave him pause.

There is every reason to believe that Labour could have successfully defended itself against a defamation case arising from the Panorama documentary. But that would have done Starmer no political good, since its effect would have been to vindicate the left-wing tendency that he wanted to delegitimize, while discrediting the faction that he was determined to empower. It would also have antagonized precisely those sections of the British media that Starmer was in the process of courting.

Getting the Message

The third self-inflicted loss stems from the loss of trade union funding. In October 2020, Unite voted to cut its financial support for Labour by 10 percent. Len McCluskey cited concerns about the political direction of the party under Starmer, and about the decision to “pay out huge sums of money to individuals who were suing the Labour Party based on the Panorama program.”

Since then, the Communication Workers Union has voted to suspend all donations to Labour other than the basic affiliation fees, while the Bakers’ Union opted to disaffiliate from the party altogether. Len McCluskey’s successor Sharon Graham recently threatened further cuts after a Labour-run council in Coventry goaded its bin workers into strike action. The response from an unnamed Labour source came with the snotty tone that is becoming a leitmotif of Starmer’s leadership:

Keir Starmer’s Labour Party will always act in the public interest. These sort of threats won’t work in Keir Starmer’s Labour Party. We would have hoped that Unite would have got the message that the Labour Party is under new management.

In fact, Unite appears to have received that message loud and clear — including the suggestion that low-paid workers are going against the “public interest” by demanding a pay increase — and is acting accordingly.

One of Starmer’s leadership pledges was to “work shoulder to shoulder with trade unions to stand up for working people” and “oppose Tory attacks on the right to take industrial action and the weakening of workplace rights.” Now Starmer himself presents trade unions as a source of corruption in the political process: “We’re not going to be influenced by those who say, you know, we’ll only provide money if you do X.”

The Hollow Crown

The Sunday Times article includes a comment from another unnamed “party source”:

The Corbynites literally reduced our high-value individual donors to zero. It’s quite hard to get people, who have the amounts of money that might be useful to a political party, to donate when you say you want to abolish capitalism.

In other words, Starmer’s party has no problem granting certain donors the power of veto over its economic policy agenda, so long as they represent the interests of capital, not labor.

Of course, there was nothing in Labour’s manifestos under Corbyn about “abolishing capitalism.” His shadow chancellor John McDonnell certainly developed an ambitious program of social democratic reforms that would have represented a clear break with the legacy of Thatcherism. However, that program would still have remained within the framework of a capitalist economy.

McDonnell even made some efforts to reach an accommodation with the more pragmatic sections of British capital, hoping that Brexit might have unsettled their allegiance to the Conservative Party. Those efforts proved fruitless in the end: no matter how distrustful they were of Boris Johnson’s Brexit plan, business leaders still preferred it to a government that would empower workers, expand public ownership, and redistribute wealth.

For Labour’s new management, it’s much easier to caricature the Corbyn–McDonnell reform agenda as a crazy scheme to “abolish capitalism” in the space of a single parliamentary term than it is to admit precisely what they are repudiating and why. There is clear and consistent support for public ownership of the privately owned sectors that were targeted by Corbyn and McDonnell. Starmer promised in his leadership platform to support “common ownership of rail, mail, energy and water.”

Yet even as British households face massive hikes in their energy bills from private oligopolies, Starmer and Rachel Reeves are digging a trench against calls for nationalization. Speaking to the Financial Times in January, Reeves scoffed and sniggered at John McDonnell’s plan for economic reform. In doing so, she merely underlined the mediocrity and subservience to corporate interests that characterize her own vision.

In the space of two years, Starmer and his allies have managed to hollow out Labour’s finances and organizational structure, driving out members and picking fights with the party’s trade union affiliates, while pouring vast sums of money down a factional drain. This operation made it possible to complete a second process of hollowing out, this time of the party’s ambition to transform Britain. Now they want “high-value individual donors” to ensure the viability of a second political force dedicated to preserving the status quo, ready to pick up the baton if the Tories lose their electoral touch.

It is possible that this approach to politics could land Starmer in 10 Downing Street. After more than a decade in office, the Tories may lose the knack of reinventing themselves. Their current polling malaise may prove to be something more than the usual mid-term blues, especially with a cluster of economic storm clouds on the horizon.

But we can already be sure of one thing. After a long period of regression, with no real wage growth for over a decade, Starmer and Reeves will be uncompromisingly opposed to any serious reforms that might shift the balance in favor of workers. Such reforms may be popular with voters, but they won’t be popular with the donors on which they intend to rely, nor with the press barons whose approval they seek.