A minister who announced a ban on charities advocating with government grant money took a £4,000 gift weeks earlier from the chair of the think tank which lobbied for the policy.
Matt Hancock, minister for the Cabinet Office, announced earlier this month that charitable grants could no longer be used to lobby government, prompting widespread criticism from civil society leaders, who sent a letter to the Prime Minister with more than 140 signatures, calling for the revocation of the clause.
The move follows an earlier announcement of a similar policy by the Department for Communities and Local Government.
In both cases, ministers claimed that the decision was taken because government had previously used charities to lobby itself, and was now instituting this rule to prevent government from lobbying itself.
Both statements praised “extensive research” by the Institute of Economic Affairs, a right-wing free market think tank for bringing the problem to light.
The IEA produced two discussion papers claiming that government used charity as a “sock puppet” to lobby itself - one in 2012, called Sock Puppets: How the government lobbies itself and why, and one in 2014, called The Sock Doctrine - What can be done about state-funded political activism?
Hancock has personally received six separate donations worth £22,000 since 2010 from Neil Record, a businessman and chair of the IEA. The most recent donation was a £4,000 gift in November last year. Record has also given more than £300,000 to the Conservative Party.
The sock puppet research has been widely criticised in the voluntary sector as ideologically flawed and lacking evidence. An analysis published yesterday by Andrew Purkis, a former chair of several of the charities criticised, called the reports “less research than a muddled polemic”.
A Cabinet Office spokeswoman said: “The decision to end the farce of government lobbying government was taken based entirely on the advice of civil service officials.
“Reasonable people will know that taxpayers' money should be spent on improving people's lives.”
An IEA spokeswoman said: "Neil Record’s support for Matt Hancock not only predates his elevation to the chairmanship of the IEA, but it also pre-dates Matt Hancock’s promotion to any government post.
"For the avoidance of doubt, he has never had any commercial or any other lobbying-type relationship with Matt in any of his ministerial posts, nor has he ever discussed his responsibilities in any context that relates to him personally, or his chairmanship of the IEA.
“He made the donation in a personal capacity, and it was in no way related to the work or activity of the Institute of Economic Affairs which is entirely independent from any political party. No IEA staff member or trustee has met with Matthew Hancock to discuss our sock puppets research.”