Employees of the Opposition party are being offered a pay rise of just two percent next year. The pitiful increase comes as inflation surges beyond five percent with the country in the middle of a cost of living crisis.
Staff are understood to have been told last week that the disastrous state of party finances had left them unable to offer a bigger pay increase.
Directors in the party will see their pay frozen will also see their pay frozen.
Party membership has plunged since Sir Keir Starmer became leader and unions have also cut their funding to the party.
The decrease in Britons paying to be members of the left-wing organisation has hit the coffers to the tune of an estimated £1.5million.
With cash woes continuing to impact Labour, Sir Keir is now expected to try and win over big-money donors to help make up the difference.
Despite their own financial crisis, Sir Keir has attempted to change voters perceptions of Labour on the issue of money in recent months.
For years Labour has trailed the Conservatives in polls on which party is most trusted with the economy.
In a speech looking to shift the public’s views, shadow chancellor Rachel Reeves said: “The Tories are becoming a high-tax party because they have become a low-growth party.
“I know that Labour needs to prove we can be trusted with public money.”
Allies of Jeremy Corbyn blame Sir Keir for the finance trouble.
The Islington North MP’s former speech reiterated said: “Maybe attacking members and alienating unions wasn’t so sensible.”
Influential socialist activist Aaron Batani added: “The party didn’t need to put itself in such a situation but chose to do so, primarily as a result of the bad management.”