Lethargy in place of strategy

Almost fifty years ago, my school report recorded that “he has lost his way and what is worse he does not appear to care”. It was, I still think, a rather unfair assessment but it is one which could with some justice be applied to the current political situation, as events of the last fortnight illustrate.

Reform’s mega-donations

The news of two mega-donations, each of £36 million, from crypto-tycoons Ben Delo and Christopher Harborne to Reform UK caused shock primarily because of their unprecedented size. But it should be remembered that, in both cases, these come on top of massive previous donations which in Harborne’s case amount to at least £12 million as well as the £5 million gift he made to Farage personally. Shocking as they may be, the mega-donations should not come as a surprise.

I discussed the concerns the previous donations give rise to in a post in July, concerns which have been amplified by these latest developments. There’s obviously something peculiar, and perverse, about a political party being so beholden to just two individuals, whatever their background. But that becomes all the more perverse when their background is the highly murky world of cryptocurrencies, given its close association with organized crime and money-laundering [1]. One consequence of this association is that there is no real way that anyone, including the donors themselves, can know the underlying activities which have given rise to the money donated.

The crypto party

That aside, whilst it is not, of course, unusual for businesses and their owners to give donations to political parties, albeit not on this scale, it is highly unusual for any single business sector, let alone one as shady as crypto, to totally dominate in this way. We might still, in very general terms, think of the Conservative party as being, in its funding base, ‘the party of business’ just as Labour is, again in very general terms, the ‘party of organized labour’ to the extent that trades unions are its main source of funding. It is altogether different that we now have a ‘party of the crypto industry’.

Arguably, this may actually rebound on Reform, in that for at least some of their potential voters it will add to the existing sense of the sleaziness of the party. For others, as with the images, discussed in my previous post, of Reform’s fundraisers wining and dining potential donors, it may be what finally alerts them to the hollowness of the idea that this is the party of the ordinary British people, pluckily standing up to ‘the globalist elite’ (the more so as the driving force behind cryptocurrency is the distinct hostility to the nation-state of anarcho-capitalists).

Indeed, from that point of view, it is telling that Reform have tried to position reaction to the donations as an Establishment plot in which they – of course – are the ‘victims’. Their claim is that, if they fall foul of the legislation currently in process in the form of the Representation of the People Bill (ROPB), this will amount to ‘retrospective legislation’ and, as such, would be not just vindictive but improper.

The ‘retrospectivity’ claim

As ever with Reform’s claims there is a lot to unpack, as Jonathan Jones’ Institute for Government briefing explains [2]. The ROPB already contained provisions which are to be backdated to 25 March 2026 (because this is the date the Rycroft Review recommendations, which underpin the Bill, were published), and retrospectivity of this sort is not unusual in relation to financial matters (e.g. and especially taxation) in order to prevent pre-emptive avoidance. These provisions were well-known to Reform MPs and the donors involved. In this sense, the announcement of the gifts now was, precisely, an attempt at pre-emptive avoidance, something quite openly acknowledged by Nigel Farage.

This most obviously applies to the issue of the domicile of donors, which is specifically mentioned in the Bill, but could also apply to a cap on the amounts that can be donated by a UK resident because the legislation grants considerable discretionary powers to government ministers to amend regulations without additional primary legislation. The desirability of such ministerial powers can be debated, but the possibility of them being used in this way was well-known: indeed, Delo has explicitly stated that he made the donation in a lump sum rather than as a series of monthly payments in case such a cap was introduced.

For Reform, this is almost a win-win situation. If the donations are allowed to go ahead, they get the money (although they are already reports of infighting about how to spend it). If the donations are forbidden, they at least get to play the victim card, something given more credence by credulous remarks about retrospectivity by liberal-minded commentators such as Daniel Finkelstein of The Times (£). In this respect, the cynicism of Reform’s manoeuvre was obvious, a cynicism then exceeded by Robert Jenrick’s hypocritical threat to use the ECHR to challenge any attempt to ban the donations (a threat which, in any case, would almost certainly be ineffective).

No more ‘good chaps’

Beyond the specifics, these donations illustrate a wider issue, which was also touched on in my previous post. There, I referred to the analysis of the legal commentator David Allen Green, who warns of the need to create constitutional safeguards in advance of a potentially illiberal government. I’m not sure if, technically, party funding rules are a ‘constitutional’ matter, but they are surely adjacent and they reveal a similar problem. It has been abundantly obvious for years, if not decades, that the rules on party funding are inadequate, and frequently give rise to scandals, but (rather like electoral reform or House of Lords patronage), no party when in government is willing and able to address the problem, and there is little political reward for doing so.

In the absence of reform, the system limps along on the basis of a kind of ‘good chaps’ theory that no one will too egregiously exploit its weaknesses (for example by, as in this case, seeking to pre-emptively subvert the new funding legislation). But the ‘good chaps’ theory is dead, having been severely strained by Brexit before, according to Peter Hennessy, the historian most closely associated with articulating it, being killed off by Boris Johnson’s premiership. And if Johnson did not mark its death knell, the rise of Reform UK certainly does.

Yet this presents a conundrum. The more specific and immediate the threat, the more any government’s attempt to address it looks to be (and can certainly be presented as) a partisan act against a particular political party, rather than a principled protection of good governance. That is exactly where we are with party funding. Having dithered and delayed for so long, the issue is now only being tackled reactively because of the mounting scandals created by Farage and Reform. That does not imply that the planned measures should not be introduced or, indeed, be made even more stringent, since doing so will become even more difficult the longer that delay goes on. But it does carry the lesson that it is urgent to address the many measures needed to safeguard the constitution, as set out by University College London’s Constitution Unit.

The Reform mega-donations illustrate another point made in my previous post. In that post, I discussed the way that the increasing violence and intimidation from the far-right – which has continued since then with the enforced closure of the Portsmouth lifeboat station and ‘protests’ in Gosport, amongst other things – should be regarded as a national security issue because of the way that it connects with both US and Russian state strategies to destabilize the UK (and Europe generally). In a similar way, cryptocurrencies connect directly with the US, and more specifically with Donald Trump. Having once dismissed cryptocurrency as a scam, he has since embraced it, seeking to make the US “the crypto capital of the world” and netting a staggering $1.4 billion from his own crypto ventures in the first year of his second term of office. Equally, cryptocurrency is central to Russia’s wartime economy and its attempt to circumvent sanctions.

Piddington: a microcosm

To be clear, the issue is not that these are two parallel, but disconnected, cases, one to do with street-level violence and one to do with cryptocurrencies. It is that they are both variants of the same thing, with both being what in my previous post I called “multiple vectors pulling in similar, or related, directions”. This is really crucial to understand the current political situation, right down to micro-events such as, in the last fortnight, the ‘independence referendum’ in the Oxfordshire village of Piddington (something itself redolent of the Brexit referendum, with some reports even referring to ‘Piddexit’, not least because it seems that no-one had thought about what would happen next).

What we saw in Piddington was the confluence of the toxic politics around asylum policy, a toxicity evidenced by the Piddington camp proposal itself, which as Zoe Gardner, a staunch advocate of asylum seekers’ rights, put it is a “ridiculous” plan [warning: link to X], but one which arises because of public hostility to, and far-right violence towards, hotels and community housing for asylum seekers. We saw, too, that the toxicity engendered by the vote led to vile online and physical intimidation of a Piddington resident who criticised the 'referendum' and some of the motivations behind it, something no doubt encouraged by Farage’s jeering response as she broke down in tears.

We also saw the exploitation of the situation across the ‘respectability spectrum’ of the political right, from Kemi Badenoch to Nigel Farage to Rupert Lowe through to ‘Danny Tommo’ (who, subsequently, has been charged with criminal offences allegedly committed in the English Channel). Additionally, underscoring that this is not simply a domestic matter, we saw that all of this was overtly supported by Elon Musk, whilst some villagers attempted to garner the support of Donald Trump for their cause. And, whilst there are no reports of a direct connection between Putin and Piddington, the involvement of the Kremlin in fermenting anti-immigrant hatred in the UK is well-established and, significantly, was recognized in Andy Burnham’s speech to the United Nations this week.

That recognition is important, and it is telling that Burnham’s proposal to address the problem with a new ‘anti-disinformation unit’ attracted cross-party support, with the exception of Farage’s Reform. But, that initiative aside, there is little sense of governmental urgency in challenging the rising temperature of this anti-immigration hatred. It’s true that Home Secretary Shabana Mahmood made a critical statement about ‘Tommo’, but at the same time she continued to peddle the line about “legitimate concerns”. Since she doesn’t propose to respond to those concerns by changing policy, but persists in describing them as legitimate, the cumulative message is that the only way to get the government to listen is through the very far-right activism she criticises.

Reset inertia

This sense of governmental inertia is even greater when it comes to the broader geo-political context. That is most obvious in the lethargy of the government’s approach to relations with the EU. Hardly dynamic under Keir Starmer, the ‘reset’ talks seem to be going nowhere and there are reports that the date for the next UK-EU summit, already much-delayed, has now been pushed back to at least the end of November and probably even later. This is apparently because the UK now has a new priority for the talks, namely that it be included in the EU’s emergent ‘Made in Europe’ rules (£). This itself illustrates the problems of the lethargy of the reset, in the sense that it has already been overtaken by ongoing events.

Another consequence of this lethargy is that it means that the widely-expected SPS deal, which hitherto was the Labour government’s top priority, will not be announced in time for the Autumn Budget in October, whereas the assumption that it would be in place has been built into government growth projections. That has a further consequence, now almost never discussed, which is that every month which goes by without an SPS deal with the EU is also another month when the UK has very limited SPS border controls on imports from the EU, with concomitant risks to food safety.

At all events, it is extraordinary that we are now probably more than half-way through the Labour government’s term of office and virtually nothing concrete has been achieved in terms of the EU reset it promised to deliver. That becomes even more extraordinary given that, in his speech to the United Nations, Burnham began by referring to the “disruption” Brexit had caused the country whilst making only a very vague reference to the need to “deepen” ties with the EU.

The lesson from Canada

This lethargy has been thrown into sharp relief by developments in the EU-Canada relationship over the last fortnight. These have included talk of “Associate Membership” from Ursula von der Leyen, the President of the European Commission, and of a “unique alliance” from Canadian Prime Minister Mark Carney [3]. It is actually by no means clear what associate membership would mean, and whether it is possible. Nor is it clear, despite much media discussion in the UK, what, if anything, its implications would be for Britain. (There are good summaries of all this by Joël Reland on the UKICE blog and by Alexandra Hall Hall in Byline Times.)

What is clear, however, is that, whatever form the EU-Canada relationship takes in the future, the attention being given to it by both parties is driven by a recognition of the new geo-politics (as well as their economic implications). Carney’s speech to the European Parliament was especially overt in this respect, and it was also notable for referring to the mutual benefits of sovereignty-pooling and differentiating this from a diminution of sovereignty. Perhaps most importantly, whilst rehearsing mutual benefits, the underlying theme was not one of instrumental calculation but of shared interests and shared values.

This is a fundamentally different approach to that taken by the UK, and so it’s surprising to see well-informed commentators, such as Jill Rutter, writing for the Institute for Government, positioning what is happening in terms of the EU “at last showing a bit of institutional imagination” in contrast to what had been the case during the Brexit negotiations. The reality is that the nature and outcome of those negotiations was shaped by the UK government’s red lines, which no amount of EU ‘imagination’ could transcend, as continues to be true of the post-Brexit reset negotiations.

In any case, it is probably not very fruitful to consider whatever may be agreed between the EU and Canada as a ‘model’ for the UK. Not only are the two cases very different economically, but also such an approach would have the same flaws as that adopted by the British government in May 2020, under Boris Johnson, when various supposed ‘precedents’ from other EU relationships with third countries were treated a ‘menu of options’ that should automatically be available, as of right, to the UK. The lesson of what is now underway between Canada and the EU should be not so much about institutional arrangements as about embracing the strategic logic articulated in Carney’s speech, and the spirit of respect and reciprocity that logic leads to in engaging with the EU.

Can Britain learn that lesson?

Nothing remotely like this is being said by the British Prime Minister, and I’m not sure it has ever been said by any of his predecessors except, perhaps, Ted Heath [4]. More to the point, it is almost inconceivable that Andy Burnham would make such a speech. That is partly because he, as an individual, seems to have neither much interest in, nor much vision of, geo-politics, or even much interest in international relations in its most general sense (something reflected in his largely anodyne UN speech).

Far more importantly, it is because, if a Carney-like speech was unlikely from any British PM before Brexit, in the post-Brexit landscape it would undoubtedly create a furore of massive proportions, with condemnation from the Tories, Reform, and much of the media commentariat [5]. Of course, it could be argued that Burnham shouldn’t be deterred by this and should proceed anyway. But, even if he were minded to do so, that wouldn’t affect the core problem that, in the absence of a plausible national consensus around a new ‘Carney-like’ strategy for relations with the EU, there could be no confidence in its durability on the part of the EU.

In short, the world has changed dramatically since the Brexit referendum, and it has done so in ways which comprehensively discredit even the threadbare strategic case of the advocates of Brexit, which was founded, if anything, on the reliability of the US as a defence partner and the continuing, largely US-driven, process of global economic liberalization. But any attempt by a British government, even if it had the vision to do so, which the present government does not, to respond to these changes in a realistic way is rendered impossible by a domestic political discourse stuck in the terms established by the Brexiters, with ‘sovereignty’ its guiding theme and an increasingly vicious ethno-nationalist panic about immigration its central preoccupation.

Drift and decay

It is this situation which links together most of what is in this post, and much that is not. We, in some collective sense (by which I mean not just the government, but, equally, I obviously don’t mean every single person), are stuck. We can’t excise populist, far-right politics, which have become more extreme since Brexit, partly as a result of Brexit. Which means we can’t adapt to the new geo-political order. Which makes us less secure, both politically and economically. Which feeds populist, far-right politics.

Above all, and this is largely the responsibility of the government, there seems to be no sense of urgency about anything: about tackling the far right, about protecting liberal norms of governance, about challenging the immigration panic, about improving relations with the EU, or about recalibrating geo-political strategy. It feels as if we are not so much drifting as decaying.

We have lost our way, and what is worse we do not appear to care.

 

Notes

[1] It should not be forgotten that George Cottrell, who is at the heart of several of Reform’s funding scandals, also emerged from the cryptocurrency swamp.

[2] Keen Brexitologists will recognize the name Jonathan Jones as that of the former head of the Government Legal Department who resigned in protest when Boris Johnson’s government announced its intention to break international law in relation to the Northern Ireland Protocol in September 2020 (for full details, see my post at the time). This, by the way, is one example of what I will mention later in this post, namely the ways that Brexit in general, and Johnson in particular, put paid to the ‘good chaps’ theory of government.

[3] There is already more to this than talk, in that Canada (unlike the UK) has reached an agreement to participate in the EU SAFE (Security Agreement for Europe) instrument, providing low-interest loans for common defence procurement.

[4] Tony Blair (who this week called for a ten-year plan to join the EU) was probably the most pro-European of post-Heath Prime Ministers, and certainly supported British membership of the Euro, unlike Gordon Brown, but he almost invariably pandered to anti-EU sentiment in his speeches. I think it is arguable that Margaret Thatcher’s ‘Bruges Speech’ of 1988 was, at least in some passages, the most pro-EU made by a PM apart from Heath (and, at the least, one of the few enunciating a strategic vision of Britain in Europe). If so, it is deeply ironic that it became a touchstone for Conservative ‘Eurosceptics’.

[5] This isn’t to ignore that, within Canada, there was some hostile reaction to Carney’s speech, but a close relationship with the EU has far, far less political charge there than it does in Britain.