The £36 million thank you note

Reform has just received £72 million from two donors and is behaving like it has been caught with its pants down.

Labour has moved quickly to capitalise on the existing public mistrust and track record of the parties to turn it into a question of legitimacy. Reform has followed them onto the pitch, insisting that the donations are permissible under “the rules” even as Labour considers changing them.

Don’t answer your opponent’s question if you can change the terms of the argument.

Christopher Harborne has already given them a better answer. At around £1mn a month, £36mn gives the party a three-year runway to the next general election.

After Reform’s conference in Birmingham, I argued in these Notes that its biggest challenge was not just political momentum but operational depth: turning an insurgent movement into a national party capable of fighting 650 constituencies.

A few days later, it received the sort of money that could begin to solve exactly that problem. £72mn is capital to build the staff, candidates, organisation and local infrastructure Reform needs if it is serious about competing with parties which have spent generations accumulating them.

And what’s more, it is in line with the other parties.

According to the Electoral Commission, Labour’s central party spent £59.5mn in 2023 and £94.5mn in 2024. The Conservatives spent £41.5mn and £52mn respectively. Across 2022-24, Labour spent around £198mn and the Conservatives £127mn. Those figures do not include local party and candidate infrastructure.

Against that, £36mn can clearly be presented as operating capital which still falls a long way short of what is needed to play in the big leagues. Even both donations together amount to £2mn a month, against central-party spending of around £5mn a month for Labour in 2023 and nearly £8mn in election year 2024.

The response has been muddled. Reform has in turn lashed out at Tory donors, suggested undue influence of the unions, and become bogged down in questions over timing and its crypto policy.

The core failing is that they accept the terms before engaging in the debate. My preferred choice would have been a quieter announcement and a softer presentation of the figure: something like £6mn a year over the next six years, with the ability to ramp up in an election. Harborne’s £1mn-a-month framing explains the economics; it does not mean Reform needed to crow about the size of the cheque.

Like the Conservatives with the North Sea EPL or the changes to the non-dom regime, the instinct was to neutralise a short term problem and leave the consequences for later.

But each concession gives away part of a wider argument its defenders should have been making: wealth creation is good, cheap energy is good and money in politics enables better support for, quite likely, better politicians.

Parking your tanks on your neighbour’s lawn may count as a victory, but there comes a point where you are living in their house and wearing their clothes and have to ask whose victory it really was.

Business has often made the same mistake.

For 30 years, companies and wealthy individuals assumed that the underlying settlement was secure. They fought individual regulatory decisions and tax rises but spent much less effort defending the broader legitimacy of wealth creation and private investment.

Pebble by pebble, the stream changed course. Any individual change can be made to sound absurd to object to: what is the problem with a 5% tourist tax when you paid ten euros in Ibiza? But then look at the graph of GDP per capita for the past 20 years, or ask why a Freddo no longer costs 10p (not that you can find one at the checkout any more) and you’ll see where it gets us.

By Brexit, when business felt compelled to make a much bigger political argument, it was badly equipped for the world as it was. Fingers were burned and many retreated again.

Charities and NGOs spent the same period building permanent advocacy operations. They help define the problem before legislation exists, commission the evidence and fill the consultations that tell government what questions to ask. By the time business arrives to argue about the detail, the argument has already happened.

There is a circularity which helps create the new reality business must then operate in. The state provides billions in grants and contracts to organisations which can then use their institutional capacity to argue for further government action. Some are effectively Serco CIC: outsourced state capacity with an agenda.

Industry groups have developed their own weakness, what I think of as ‘access capture’. They seek access in order to represent members, then become dependent on that access to prove their value for membership fees. An industry can fight furiously for an exemption or transition period while conceding the argument which made the policy possible.

As a consequence, too much business advocacy is now about making bad policy survivable rather than making good policy politically possible.

In my view the conclusion is that business should become more, not less, political. The response to the increase in employer NICs was belated and unsuccessful, but retailers did eventually do something Reform has failed to do here: they changed the terms of the argument. By tying layoffs, deferred hiring and price rises directly to Rachel Reeves, retailers helped turn what might have remained a relatively obscure employer tax into a recognisable tax on jobs. The Treasury can still raise it again, but it can no longer expect to do so quietly.

Business should get more muscular about defining the argument itself, communicating what it wants and making the case for why the rest of us should want it too. It is only by changing the climate that you can begin to look forward to sunnier weather.