City leaders are getting cozy with Reform UK. Just don’t tell anyone.
Senior figures in banks, asset managers and other financial services businesses feel they can no longer ignore Nigel Farage’s U.K. populist party, which has maintained a strong lead in opinion polls for months.
The figures glimpse an opportunity to influence the young party, which — if those polls are to be believed — could be leading Britain in a few years’ time.
Reform UK, set up by Farage in 2016, counts four MPs in Westminster. Its flagship policies include pledging to cap the number of migrants coming to the U.K. and implementing vast tax cuts.
But other than strongly pro-crypto policies, the party hasn’t made its view on financial services clear, and the City sees the chance to influence a broadly blank slate as too tempting to ignore.
Still, financial institutions, which are happy so far with what they’re getting from the Labour government, are cautious to admit they’re making a deal with the devil.
“When I’ve been speaking to people, they say ‘we’re really interested in what’s going on, but don’t tell anyone we asked’,” Farage’s former right-hand man Gawain Towler said.
This taboo against being seen as actively engaging with Reform UK, even while wanting to understand the party, seems to be permeating the City. Banks and asset managers attending Reform’s party conference at the start of next month are reluctant to actively speak about the matter.
One senior trade body executive, granted anonymity to speak freely, said they had already met one-on-one with a Reform MP months ago, as well as with some party officials on a separate occasion.
However, Reform has since postponed any meaningful conversations about policy until after the conference, they said.
“I was not sure whether I should go to [the] party conference, and then I heard that the big boys of the City are going,” the figure added. “The traditional finance people that I would have thought ‘well, maybe it’s premature’ … they are going.”
Those City types will be joined by scores of British businesses at the upcoming conference, which are also getting flirty with Farage’s party.
Reforming the status quo
Along with its conference, Reform has been working to build the necessary ties with the financial industry. Farage and deputy leader Richard Tice have recently been attending various breakfasts with the business community, which often involve members of the City.
Reform even poached John Gill, a policy and communications exec from City trade group UK Finance, to work on its external affairs team.
“People like Farage and Richard Tice and others are intensely at ease in that community, because it’s essentially their people. Once the City have got over their squeamishness, they find that they get on with the people involved. But there is squeamishness,” Towler acknowledged.
The party even has the view that “the City is going to be in some ways easier” to win over than the broader business community, thanks to Farage’s existing relationships with the financial world, Towler added.
Reform has also taken a keen interest in cryptocurrencies, mirroring U.S. President Donald Trump — and making some parts of the City very happy. In May, Reform became the first party in Europe to accept political donations via Bitcoin and has proposed the creation of a new government reserve of digital currencies.
There have already been some issues between the party and broader financial institutions, however. Bank of England Governor Andrew Bailey lashed out at Farage in June after he proposed scrapping interest on the central bank’s reserves, while Tice has suggested that the Treasury should be allowed to contribute to the Bank’s interest rate decisions.
Banks especially are more cautious about engaging with the party. A saga around Farage having his account closed by private bank Coutts in 2023 due to his political views led to the resignations of two CEOs and to the party leader strongly condemning the wider banking industry for the practice.
“If you’re a high-street bank, the whole specter of debanking hasn’t really gone away,” admitted one Reform official, granted anonymity to speak freely. “That sort of issue was kind of ‘of the moment.’ It’s not something that Nigel is continuing to push on.”
Nevertheless, the party is expecting several banks to head to its conference next month, offering an opportunity to repair the relationship in the event of a general election win by Reform UK.
Not easy being green
Still, the party’s strong anti-renewables stance is also making some across the City nervous, given the long-term plans of financial firms and the billions they have pumped into the sector.
Bernard Fairman, executive chair of FTSE 250 investment firm Foresight Group, said he was set to meet with Tice imminently, having previously met Rupert Lowe (who is no longer a member of the party and now sits as an independent MP).
“The reason I’m seeing [Tice] is he sent a letter out to people like me, saying you manage lots of renewable energy assets … we’re against that and we may not stand behind the contracts” that the government has already signed, Fairman said.
In addition, the one thing that markets hate is uncertainty. The rotating carousel of Reform MPs, coupled with the potential risks that come with a brand-new party set up only six years ago, means some feel more concern than opportunity.
“It is a risk in the background at the moment,” said Anna Rosenberg, head of geopolitics at Amundi. “There’s so many more pressing short-term issues that are here already.”
However, the rise of Reform isn’t without precedent. Similar political waves have occurred across Europe, without causing a complete fracturing between the government and the financial industry.
“The populist government in Italy has been a lot more pro-business and moderate than what was feared,” Rosenberg noted. “There is a real risk in these parties coming into power, but they face a lot more constraining factors than, say, in the U.S.”
“Once the squeamishness is got over, once they’ve just looked at the numbers and said come on, guys, we really need to get it, then I think they’ll find a very productive relationship,” Towler added.
“The quicker the institutions of the City wrap their head around that, the better for everybody, because we’re not going away.”
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