Labour party staff are considering strike action after rejecting a below-inflation pay offer made by general secretary Jennie Formby.
In a move that would cause Jeremy Corbyn huge embarrassment, some workers at the party’s HQ are threatening industrial action if a better deal fails to materialise, HuffPost UK has been told.
On Wednesday, the GMB union’s Labour branch rejected an offer of a £600 flat rate increase in salary, and later this week Unite colleagues are expected to follow suit, sources said.
The cash squeeze follows warnings earlier this year that the party is heading for a budget deficit unless it scraps planned projects or finds other savings.
Staff in London and Newcastle are particularly furious that they are not being offered real-terms pay rises given the financial windfall from the huge influx of new members following Corbyn’s leadership elections.
The party has not been formally informed of any rejection of the pay offer and management believes that negotiations are still very much ongoing.
In its proposal to unions, the party stressed “in all that we do we, we must remember that the majority of our income is members’ money”.
“Whilst we acknowledge that this does not mirror the pay claim submitted by the JTUC [Joint Trade Union Committee], we hope that all understand the amount of consideration that has gone into the offer which aims to reward staff while ensuring that the party continues to enjoy financial stability.”
Several insiders point to the big losses from the LabourLive festival held in London last year, as well as a major expansion of community organisers across the country. Staff recruitment is already frozen in a desperate bid to save money.
After years of being in the red under Tony Blair, the party moved into the black in 2015 following loan restructuring and fiscal prudence. It then received a big boost from membership fees as Corbyn doubled the number of people in the party.
The ruling National Executive Committee (NEC) was given a confidential financial presentation in January and told that the party’s business board would decide next steps.
Corbyn allies say that the party spent a lot because it has been on alert for months for a snap election that could have been triggered by the Brexit chaos.
Supporters of Formby stress that as a former Unite official she is acutely aware of the need to protect workers’ pay and conditions.
But although campaigns spending and a general election fund are said to be healthy, day-to-day finances are tight following a big increase in spending in the past year.
One insider said: “The bit that particularly stuck in the craw was the paragraph in the proposal about using members’ money in the most effective way.
“Nine months after the costly debacle of LabourLive and after reports of big salary bumps for some, this was seen as insulting.”
Another said: “It’s embarrassing for Jeremy, but you can’t talk about giving workers a decent pay rise and not do the same for your staff. Party members must be wondering why we can’t afford to pay our own properly.”
Staff were outraged late last year when a plan was floated to end their final salary pension scheme to a career-average alternative.
Scores of Labour MPs recently complained about a proposed 1.5% increase for their parliamentary staff, saying “a below inflation increase means most of our staff would now be worse off because of the rising cost of living”.
Parliamentary staff say their own pay increase was “significantly lower” than that given to MPs and “fails to even keep pace with the cost of living”. MPs are getting 2.7% extra from April, taking their salary to £79,468. Many researchers earn much lower salaries.
A Labour Party spokesperson said: “The party considers pay negotiations to be confidential and ongoing. Staff are hugely valued.”