Peering tentatively into 2026, the UK’s business landscape is fraught with uncertainty, but one trend stands out: the remarkable ascent of Reform UK in the eyes of boardrooms.
A groundbreaking report from Bradshaw Advisory, where I serve as a senior adviser, polls over 500 business directors and reveals a seismic shift in sentiment. Far from the fringe, Reform – the party whose governing board I serve on – are now neck-and-neck with Labour at 24% in a hypothetical election vote ‘on behalf of their companies’. Add in the 10% who prefer Labour under a different leader, the governing party edges ahead, but only just. This isn’t mere polling noise; it’s a damning indictment of Labour’s first 18 months in power, marked by policy flip-flops and economic jitters.
The report’s Political Risk Index, scoring risks on a 1-10 scale (where 7+ signals severe threats), paints a grim picture for 2026. Overall, businesses rate political risk at 5.9, with fiscal and monetary policy topping the charts at 6.1. A staggering 51% of leaders see it as at least a 7/10 problem, 87% believe it won’t improve over this parliament and 83% expect it to worsen in the next three years.
The chaos of 2025 – from the disastrous Budget riddled with leaks to the near-constant U-turns – has left scars: 32% report direct financial hits from policy changes, rising to 43% in infrastructure and 39% in financial services. As Tom Lees, Bradshaw’s CEO, notes in the foreword, political risk has evolved from ‘PR fluff’ to a boardroom fixture, driving decisions on investment, hiring, and strategy.
Nowhere is the disillusionment more evident than in the collapse of confidence in the Conservative Party. Once the natural home for business, the Tories limp in at just 18% support, not too far ahead of the Liberal Democrats, at 13%. This isn’t surprising after their own era of instability, but it underscores a broader realignment. Businesses aren’t just fleeing the old guard; they’re splitting along sectoral lines, with Reform emerging as the disruptor for those battered by high costs and regulatory overreach. This is despite the Conservatives, for eons having marketed themselves as the ‘Party of Business’: no more.
Take the industrial, manufacturing and defence sectors: nearly 39% back Reform, far outpacing Labour’s 24% (Starmer-led). These heartland industries, long squeezed by global competition and domestic burdens, see Reform’s pledge to slash bureaucracy and rethink expensive energy as a lifeline. The report highlights how fiscal pressures, like employer National Insurance hikes, are acute here, with many delaying investments (23% in manufacturing) or cutting staff (27%).
Reform’s narrative on state overreach resonates because, as the data shows, these sectors face elevated risks from labour markets (6.0 score) and energy costs. But it’s Net Zero that looms largest. Reform’s vow to overturn the agenda, ditching subsidies for renewables and easing planning for traditional energy, offers a path to survival. Without it, these industries face medium- to long-term extinction in the UK amid soaring energy bills and uncompetitive costs. It’s hardly shocking that 46% in transport and logistics, another energy-dependent field, also lean Reform.
Even more intriguing is the consumer sector’s tilt. Retail, fast moving consumer goods and hospitality show 26-31% support for Reform, surpassing Labour in some sub-sectors. These customer-facing businesses, hammered by 2025’s rising costs (38% in hospitality reported feeling the impact of Labour’s U-turns), are pivoting away from Labour’s tax-and-spend approach. A quarter are cutting staff in response to risks, far more than scaling back capex (15%). Reform’s focus on low taxes and migration controls appeals to firms grappling with labour shortages and wage pressures, issues scoring 5.9 on the Index. Again, Net Zero bites: these sectors worry about energy policy implications (6.4 score), where pass-through costs to consumers erode margins.
Then there’s the energy sector itself, a fascinating outlier. Despite Reform’s plans to upend Net Zero, potentially devastating renewables with subsidy cuts and favouring fossil fuels, 20% of energy and utilities leaders back Nigel Farage’s party. That’s behind Labour’s 34% (combined), but notable given the disruption ahead. The sector scores political risk at 6.0 overall, with sector-specific taxes as the top driver (6.8). Intriguingly, energy bosses are less concerned about energy policy costs (6.0) than outsiders like financial services (7.4) or manufacturing (6.7). Why the support? Perhaps because the broader sector sees Reform’s pragmatism on planning and foreign policy (5.8 score) as offsetting the pain of renewables. With 30% cutting staff and 23% scaling back investment due to risks, stability in fossil fuels could trump green ideology for many.
Contrast this with sectors sticking with Labour: tech (36% support vs. 12% Reform), financial services (34% vs. 22%), infrastructure (34% vs. 39% – a close call) and professional services (34% vs. 14%). These often capital-light, service-oriented fields are bringing forward investments (39% in finance) and hiring (27%), betting on Labour’s stability despite high risks (6.5 in finance). The HR industry, though not singled out here, is the UK’s fastest growing sector, and also no doubt sees a threat from Reform’s contempt for DEI and associated regulations – the industry’s lifeblood. Yet even here, pessimism reigns: 20% in tech rank U-turns as a top-tier risk, double the average.
What does this mean for 2026? Businesses crave clarity, 64% slammed budget leaks for creating ‘undue uncertainty’. A Starmer leadership challenge worries 48% (10% see it as 10/10 risk), and 45% fear a government change. But Reform’s surge signals deeper malaise. As Lees puts it, political risk now demands ‘sharp diagnosis’ and engagement. For Labour, it’s a wake-up call: deliver on growth without more chaos, or watch boardrooms flirt harder with Farage. For the Tories, irrelevance beckons unless they reclaim the pro-enterprise mantle. And for Reform? Their business charm offensive, bolstered by hires like Nadhim Zahawi, is paying off, proving they’re no longer just a protest vote.
In a year of rising risks, this sectoral split could reshape politics. If Net Zero’s costs continue to bite, expect more defections to Reform, especially from industries fighting for survival. The boardroom ballot is in: stability yes, but not at any price.
