Mo' Money, Mo' Problems? Farage Swims in Cash, but Will It Help?

Well, the best way to think about it might be the old economic law of diminishing marginal returns: The first million pounds a party might spend is invaluable in terms of reaching voters previously unaware of its existence, policies or message. But by the time one gets to the 72nd million pounds of advertising or other spending, the market is likely to be saturated with the party’s message already. Each additional pound spent, in other words, brings in fewer new voters than the last. This is an unimpeachable law of economics, and it suggests that the additional funding, while great for party morale, will not in itself be determinative.

There is also another reality, encompassed in that well-known US rap phrase: “Mo’ Money, Mo’ Problems.”

The Political Spending Trap

One of the difficulties of being a political party engaged in a tight election with a functionally unlimited budget is that it becomes tempting to believe that certain problems can be addressed by further spending, rather than re-evaluating strategy or message.

The latter is traditionally a hard thing for politicians to do: Those who enter politics habitually believe that their policies, message and ideas are superior to those of their opponents (otherwise they might not enter politics at all). And often, when their campaigns struggle in the polls, politicians default to blaming a lack of awareness of what they truly stand for. In such circumstances, the temptation becomes simply to spend more on advertising or marketing.

There are real-world examples of this: Note that in the USA, Donald Trump was outspent by his Democratic Opponents in both 2016 and 2024. In each case, books written afterward by Clinton and Harris campaign staffers diagnosed the same problem – the senior campaign staff simply refused to believe that Trump’s message was more popular than their own and so responded by investing ever more money in advertising and messaging that was not working.

Money, Donors, Underdogs and Legitimacy

There is also, of course, a legitimacy problem.

The average voter, broadly speaking, tends to be skeptical of the idea that a billionaire will ever donate tens of millions of dollars or pounds to a political party or candidate simply out of political conviction. This is particularly true in the UK, which has a long history of party donors suddenly becoming lords or knights of the realm in honors lists handed out by governments.

Further, there is what one might describe as the “underdog problem”: Reform UK having access to a war chest of £72m ($97.1m) makes it considerably harder for the party to position itself as the plucky underdog fighting against the relentless UK establishment. Instead, it permits Labour and the Tories to invert that narrative into something else: the parties of the people fighting against Farage, who is (in his opponents’ telling) owned and controlled by billionaires.

The Wasteful Spending Trap Reform Must Avoid

Finally, there is the potential for significant waste if Reform does not manage its windfall correctly. Candidates and parties fall victim to this all the time: they spend money on things they would not prioritize, for good reason, had they a tighter budget. These can range from the relatively small, such as using higher-quality paper than strictly necessary for leaflets and campaign material, to the enormously large, like investing in some whizz-kid AI technology to profile voters that sounds exciting but, in the end, delivers marginal to no gains.

So, the idea that Reform’s windfall guarantees victory or even a strong electoral performance is perhaps misleading.

The Debate over Political Funding

Yet the donations have opened another debate, one which has much graver implications for UK politics: some of Reform’s opponents now wish to ban donations altogether and move UK politics towards a state-funded model.

That model already exists in some EU countries, including in the UK’s nearest neighbor, Ireland. There, parties are allocated generous state funding based on their performance at the last election. In theory, this is supposed to stop wealthy donors from buying influence. In practice, however, it arguably does something much worse: it cuts politicians off from voters entirely.

Since Ireland introduced state funding for parties in the late 1990s, following corruption scandals, there has been a correlation with another development: the erosion of party support networks, reductions in volunteers and parties that were once mass movements becoming increasingly professionalized NGO-type operations without the same connection to the voters as before.

One reason for that is that parties no longer have to fundraise.

In the End, Transparency Beats Oligarchy

Another problem with the state-funding model is that it is fixed and inflexible: a party that performed well at the last election is guaranteed a financial advantage, even if the voters now overwhelmingly favor a former rival or a new party.

A new party is essentially strangled in the crib, legally unable to access funds from large donors and denied any state funding because it is new and lacks past performance at an election to access state funding.

Whatever the flaws of the UK model might be, at least it does permit new entrants to the market and gives organizations like Reform the chance to shake up UK politics.

Money alone will not guarantee Farage’s success, and, as noted here, it may even cause significant problems. But it is preferable, in the round, that Reform and its wealthy supporters are able to compete at election time, as opposed to a system where the same old parties act as a cartel and lock any newcomers out.