Questioning Motive: Institute of Economic Affairs

In the latest of our regular feature examining the motives behind notable organisations in politics, we take a look at the Institute of Economic Affairs (IEA).

Who they say they are: The IEA claims to be an “educational and research charity” and the original “free-market think-tank” that says it is “entirely funded by voluntary donations from individuals, companies and foundations who want to support its work, plus income from book sales and conferences”.

Who others say they are: Shadow Cabinet Office Minister John Trickett has said the IEA was behind “a small group of establishment figures, funded to the tune of millions, [who] are covertly pursuing a political campaign in favour of extreme free trade, acting in effect as lobbyists for secretive corporate interests.”

Does this matter?
Political organisations being infiltrated, run, or captured by those serving opaque interests (personal, corporate, or foreign) can threaten the successful functioning of a democracy. So clearly there are some concerns if it happens.

So who is right?

Such concerns have seen the IEA rebuked by the Charity Commission and ordered to remove a report from its website, and a wider investigation into the IEA that is ongoing. Meanwhile, Transparify examined IEA and rated it as “highly opaque”.

The IEA maintains, however, that it is right to respect the privacy donors, and that it does not “sell policy” and does “no contract work”. 

It is also important to stress that many charities accidentally cross Charity Commission lines and readily put things right when it is pointed out. The IEA is also particularly at risk of either accidentally or wrongly appearing to break Charity Commission rules on political influencing because of what its charity is for.

Its work to support free-market thinking is an agenda that leans a certain way party politically. The Conservative Party is unambiguously more inclined towards free market policies than Labour, so it would be odd if Labour and Conservative MPs associated with the IEA in equal numbers, and its work may appear party-political even when it is not.

This mitigates the criticism that it has links with Conservative MPs – such as meetings with then Brexit Ministers David Davis, Steve Baker, and Lord Callanan. 

However, because of this, it is harder to overlook the opaque nature of its funding compared to less naturally party-aligned charities like the NSPCC. A donation to help stop cruelty to children is unlikely to prove damaging to the transparency of a democracy. The privacy of a donation to a free-market think-tank clearly could. 

So does it? 

On the face of it, the IEA is a little banged to rights here. Its own director Mark Littlewood was secretly filmed telling what he thought was a possible donor that they were “in the brexit game”, that a donor could shape substantial content, and that it offers access to ministers and civil servants. 

That said, even a charity needs to bring in money – and money is a warping motivation. He would hardly be the first person to dishonestly promise the Earth to seal a deal.

Unfortunately for the IEA, occasional discoveries about its finances do align very closely with its research choices and outcomes.

The IEA issued reports supporting tax havens as a benefit the economy. It also received funding from the Guernsey and Jersey financial sectors.

The IEA issued a report supporting more Casinos. It also received funding from the National Casino Forum. 

The IEA opposed plain packaging for cigerettes. It also received funding from British American Tobacco, Philip Morris and Japan Tobacco International. 

That is not a good look for an organisation that claims not to lobby on the interests of donors.

Conclusion

Regardless of where the money comes from, it is almost impossible to make a sensible case for trusting the IEA. Even if it is honestly not a lobbying group, and the alignment between donations and policy research is coincidental, no one could reasonably believe that as things stand.

The IEA can solve that problem by becoming transparent. That it chooses not to says more than each individual transgression and the likely motives behind them. 

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