From Tufton Street to Downing Street: The Opaque Charities at the Heart of Power

From Tufton Streetto Downing StreetThe Opaque ‘Charities’ at the Heart of Power

Rachel Morris tracks the burgeoning influence of ‘free market’ think tanks on Conservative politics

‘Charity’ brings to mind organisations doing ‘good works’ with care and generosity. Research finds that the part of the brain connected to the feeling of satisfaction fires neurons when you donate money. So charities should be a positive experience for all concerned.

The Charity Commission for England and Wales has existed in some form since 1853, and is an independent government department with powers to regulate and investigate registered charities. It maintains a register of approximately 170,000, regulating around £81 billion in charitable income.

The range of such organisations is immense, from small food banks to global development concerns, so the definition of what constitutes a charity under The Charities Act 2011 is necessarily broad. The Act states that a charity is an organisation established for charitable purposes and for public benefit only. But many charities don’t perform the activities we might imagine. This is perhaps truest of organisations known as ‘think tanks’.

A think tank’s role is to conduct research and policy analysis, publish findings, which may include hosting conferences and seminars, and work closely with public servants to advance their findings and aims, funded through private donations or public funds. Think of a think tank as the offspring of an academic and a lobbyist. There are at least 120 in the UK, some highly respected. The UK’s oldest think tank, the Fabian Society, was founded in 1884.

Registered charities must submit annual reports and accounts to the Commission, but aren’t required to reveal their donors. Calls for more transparency were swerved in 2017, following a consultation in which many respondents expressed fears that it would cause donations to drop.

Drawing a private veil over public transparency isn’t the only benefit of registration. Take private hospitals, of which about 25% are charities. This allows these institutions to claim up to an 80% discount on business rates. NHS hospitals pay rates in full. Charities receive other tax breaks, as do donors, and registration provides an automatic veneer of respectability and probity. Private schools receive some £3 billion a year in tax breaks.

There are think tanks, however, all on the political right and for stated educational purposes, which have caused concern to the public and the Charity Commission itself – and which now have influence in Liz Truss’ new administration.

The Commission issued the Institute of Economic Affairs (IEA) with an official warning of misconduct and mismanagement in 2018, finding it breached charity law with its report, ‘PLAN A+: Creating a prosperous post-Brexit UK’, and an associated launch. Both sought to change Government policy on an issue not connected to the IEA’s stated purpose of ‘furthering education’, breaching guidance on political activity and campaigning. Neither the report nor the launch speaker programme was balanced or neutral, as required by law, risking a public perception that the IEA is politically biased.

The Commission also ordered the Legatum Institute Foundation to take down its report, ‘Brexit Inflection Point’, for breaching political impartiality, then fired a warning shot over the bows of every think tank about duties of balance and neutrality. Legatum’s chair of trustees defended its publication, saying that support for free trade and enterprise was not a ‘political position’ but one “informed by empirical evidence and the experience of nations over the centuries”.

IEA trustees had to give the Commission written assurances that it would not “engage in campaigning or political activity that contravenes legal or regulatory requirements”, and that they would take internal steps to ensure this. Nonetheless, anyone who’s watched the BBC’s political flagship programme Question Time knows that it often provides a platform for the views of IEA representatives, without exception pro-Brexit, anti-EU, and in favour of the privatisation of public services.

The IEA says on its website that it is “independent of any political party or group, and is entirely funded by voluntary donations from individuals, companies and foundations who want to support its work”. Yet openDemocracy has revealed close connections between it and senior Conservatives, staff having ease of access, one having arranged for the then-Brexit Minister to meet with special interest groups.

The IEA has accepted funding from tobacco and gambling firms and created a free magazine for A-Level students promoting NHS privatisation and denying climate change science. OpenDemocracy also uncovered funding from US-based fossil fuel companies and climate change deniers to the IEA and similar ‘charities’.

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The IEA itself boasted that more than a dozen members of Boris Johnson’s Cabinet – including Kwasi Kwarteng, Liz Truss and Priti Patel – are “alumni of IEA initiatives”.

The IEA had an enormous influence on Margaret Thatcher’s premiership, and it and other pro-Brexit think tanks acted as sculptors on the soft clay of a divided Conservative Party during the EU Referendum campaign, leading us to the party of today – led by fervent libertarian Liz Truss.

Indeed, Truss founded the Free Enterprise Group (FEG) of MPs in 2011, less well known than the European Research Group (ERG) of which she is the anointed lamb. Administrative support for FEG is provided by the IEA; the FEG having been described as the ‘parliamentary wing’ of the IEA, at whose events Truss has spoken.

Truss is also tied to other free market think tanks – known as the ‘Tufton Street’ think tanks, due to their clustering at the Westminster postcode. These include the Adam Smith Institute, with Truss selecting three Tufton Street figures as advisors on becoming International Trade Secretary – as well as appointing a number of similar think tank operatives to departmental bodies.

Truss has likewise met in the US with libertarian think tanks engaged in climate change denial.

The head of the IEA, Mark Littlewood, was recorded in 2018 telling an undercover reporter posing as a donor that, in exchange for substantial donations, they would be able to attend “intimate” private dinners and lunches, at which attendees “get to know Cabinet ministers on first name terms”. He suggested that, in exchange for funding a £42,500 IEA report on innovation in agriculture after Brexit, it might buy them access to then-Environment Secretary Michael Gove. Littlewood was appointed to Truss’ “refreshed Strategic Trade Advisory Group” in late 2020.

A recent Ipsos poll found that 84% of the British public are greatly concerned about climate change, yet Government policy on the issue is apparently being influenced by opaquely-funded industry-connected ‘charities’ with easy access to the new Prime Minister.

A close ally of Truss is Steve Baker, who in July resuscitated the Thatcherite pressure group Conservative Way Forward, financially supported by the chair of the Global Warming Policy Foundation – described by DeSmog as the UK’s “principal climate science denial campaign group” – Neil Record, who’s also chair of the IEA. Baker is a GWPF ‘charity’ trustee, and has shared its paper claiming “no evidence of a climate crisis”.

I wrote to the BBC recently to complain that the IEA had yet again been given airtime on Question Time, despite its opaque funding. The response completely skirted the question, and an appeal to Ofcom saw no result. The BBC promised in 2019 that lobbying outfits branded as “think tanks” would no longer be able to appear on the BBC without viewers being told about their funding, but this pledge appears to have been dropped.

You’ll recall that, for an organisation to be a charity, it must also meet a ‘public benefit requirement’. How does the public benefit from unelected Government insider think tanks, pushing and peddling influence? This question is rhetorical.