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Donors and businesses are turning their backs on the Tories for Labour and Nigel Farage’s Reform UK as the party enters its conference with question marks over its finances.
Insiders have told The Independent that a number of red flags have been raised in preparation for the first annual conference since the historically poor general election defeat in July.
In the weeks before the conference in Birmingham, set to get underway on Sunday, it was claimed that the party was still struggling to find a sponsor for its VIP blue room, previously sponsored by the retail company Regent Street Group.
Sources also suggested that the level of donation required to gain access to the VIP room has significantly dropped.
The party has denied a lack of interest from members and businesses, However, a number of major donors including property magnate Nick Candy have either openly or privately switched to Reform or just no longer give money.
Insiders claim that the party is giving away tickets to young activists in a bid to get people to attend the conference.
The annual Business Day dinner at the conference is now going ahead but was in danger of being cancelled because of lack of interest and claims the party was trying to charge too much.
So short is the party of funds that the candidates to replace Rishi Sunak have all been asked to produce £50,000 as a precondition for being allowed into the final four to impress members this week. The final two will need to find another £150,000 of backing or be eliminated.
One senior figure in the party told The Independent that “things are dire”.
“One donor has been allowed into the VIP blue room after giving just £3,000. Previously you would not get in there for anything less than £20,000. The party is just desperate for anyone to give money. I’m not sure it is even worth £3,000 to go in there though.”
A senior City figure expressed anger that the party had tried to charge separately for a business dinner in addition to a business event.
“Nobody wanted to go and they certainly did not want to spend extra for the dinner. Who would you talk to anyway? It is not like Jeremy Hunt is chancellor anymore and we do not even know who the leader is going to be.”
Meanwhile businesses were desperate to get access to the new Labour ministers at their party conference in Liverpool last week.
But what has really panicked Tories is the flight of donors to Reform UK and Nigel Farage.
A dinner raising money for Reform organised by Mr Candy, whose wife Holly Valance considered running for Reform in the election, is understood to have involved “a lot of well known names” from long term Tory donors.
The reason for the switch appears to be a belief that Mr Farage is now among the most influential figure on the right of British politics.
Added to that, Reform’s new chairman Zia Yussuf – a multi-millionaire businessman and former Tory member – has been playing a major part in fundraising for Mr Farage’s party.
Other Tory supporters, described as “friends of Boris Johnson” are said to be staying away from the conference because the party has no power and a historically low number of MPs.
One of the main donors who has continued to stick by the party is Lord Michael Spencer, whose son Patrick won Central Suffolk and North Ipswich for the Tories but was selected in controversial circumstances.
The Independent has spoken to another major donor who has returned to the Tories since the election, but only to support Tom Tugendhat’s leadership campaign and is making continued support conditional on the former security minister winning.
Sources blamed financial problems and struggles to raise interest in the party conference on two factors.
The catastrophic defeat at July’s election, which left the Conservatives with just 121 MPs, has made the party unappealing for the next five years, with no real influence and questions over whether they can turn things around.
But the extended four-month leadership contest is also being blamed, and seen as making the party irrelevant even as Labour faces a difficult start to its time in office.
A number of MPs and other senior figures have complained that the new leader should have been unveiled at conference as a launch pad for the party’s recovery.
Instead “it is just talking to itself” with the four candidates – Robert Jenrick, Kemi Badenoch, Mr Tugendhat and James Cleverly – all pitching their case to replace Mr Sunak.
Teesside mayor Lord Ben Houchen, now a powerful figure within the party after securing a rare victory this year, told The Independent he was unhappy that the new leader will not even be in place to respond to the Budget on 2 November.
He said: “It feels to me like we have vacated the playing field while this leadership contest is going on. And my biggest concern is that for the sake of a week, or maybe even two weeks, could we not have brought it forward so that a new leader is in and can respond appropriately to the Budget?”
In response, the Conservative Party insisted interest in conference was still high, claiming 20 per cent more members are attending this year.
A Conservative Party spokesman said: “The Conservative Party Conference will be returning in full force this year, including its Business Day.
“We have seen significant interest in this, with high demand for tickets and partnerships and a full exhibition hall. Business Day partnerships in particular are up on last year’s conference and our business dinner is fully sold out.
“Unlike Labour, we are focused on providing value at our events to ensure that business leaders and policymakers feel their time has been well spent.”
A source added: “We do not recognise the claims on business not attending and low prospective attendance.”