Andrew Purkis: Does the Commission really have no regulatory concerns about the IEA?

03 Apr 2024 Voices

The regulator’s former board member discusses concerns raised over the think tank’s charitable status in a recent formal complaint…


Last month, the Charity Commission received a complaint supported by the Good Law Project (GLP), in the names of three MPs and a parliamentary candidate from four political parties, and me, about the Institute of Economic Affairs (IEA), whose charitable purpose is the advancement of education.

The complaint was closely argued and concluded that the IEA had a partly political purpose (which no charity may have), did not abide by the Commission’s guidance about the nature of charitable education, and did not ensure sufficient distance between the charity and its non-charitable connected bodies.

With lightning speed, the Commission replied to say that it had no regulatory concerns and was not going to raise any of these issues with the IEA.

This followed a speech by the Commission’s chair to the effect that political think tanks are a good thing for our democracy, and that therefore the regulator would only in rare instances consider intervening because of some politically inspired complaint. Here are the issues at stake.

Is the IEA partly political in its purpose?

The Commission’s line is that the IEA’s philosophy in favouring freedom and free markets is a legitimate broad value base for research and educational publications, just as (say) the Institute for Fiscal Studies has a broad value base in more conventional or middle-of-the-road economics.

The counter-argument is that the IEA has always explicitly aimed to help shrink the state in all possible dimensions as a core part of its endeavour; and it is actually part of its founding purpose.

That is political, as defined by the Commission, and according to charity law, a charity must have an exclusively charitable and non-political purpose.

Advancing education as defined by charity law

The Commission’s guidance is clear that charitable education must not be promoting a controversial and pre-determined point of view. It must present different sides of an issue as appropriate in a reasonably neutral and balanced manner, that lets the reader draw his or her own conclusion. You may feel that doesn’t sound like the IEA?

Trying to justify its continuing charitable status, the Commission has argued, on the one hand, that the IEA’s free market ideology is “relatively uncontroversial”. 

On the other hand, the Commission has also argued that because one think tank may put forward a case from one point of view, and another will put forward the case from a different point of view, it’s OK for a particular charity not to be reasonably balanced and neutral etc after all.

With such obviously contestable arguments, the Commission cannot reasonably regard the matter as already discussed and closed.

The counter arguments are obvious. Since the IEA is consistently one-sided and selective in its militant shrink-the-state advocacy – a highly controversial and pre-determined position, not least after the Liz Truss debacle – it should not qualify as advancing charitable education.

Charitable and non-charitable arms

The GLP also argues in detail in the complaint that the non-charitable connected bodies allied with the IEA are often run by the same cast of characters, so that, as at the end of Animal Farm, the pigs looked at the men and the men at the pigs and nobody could tell the difference any more.

I do not know why the Commission thinks this doesn’t require any courteous answer or investigation.

Victory for free speech?

The IEA has hailed the Commission’s decision that there is nothing here to investigate as “a clear victory for freedom of expression”.

In fact, it has nothing to do with free speech, because the issue is not whether the IEA should exist and say whatever it likes. It is whether it should be a charity and, if so, abide by the Commission’s guidance.

After all, there are plenty of non-charitable right-of-centre think tanks like the Centre for Policy Studies, the Adam Smith Institute, and the Taxpayers’ Alliance, which are not so different from the IEA and make their contribution in a free society. Should they be charities, on the grounds that they too are a good thing?

And there are plenty of think tanks that really do advance education as defined by the Commission.

Summarily dismissing all these concerns is not in my view going to do a great deal for the reputation of the Commission for fair, consistent and balanced regulation without fear or favour. 

IEA response

Andy Mayer, the IEA’s chief operating officer, wrote in response: “The Institute of Economic Affairs (IEA) is an education charity concerned with advancing public understanding of the institutions of a free society and highlighting how markets help solve economic and social problems.

“The IEA commissions dozens of peer-reviewed publications annually, hosts academics, students, and teachers for conferences, seminars, and internships, and creates digital content on economic issues.  
“IEA contributors are also highly visible through regular appearances in print and broadcast media – expressing views supported by our extensive back catalogue of research from the last seven decades. The IEA is strictly independent of any political party but, like many charities, seeks to engage policymakers and the public. 
“Orlando Fraser, the chair of the Charity Commission, recently wrote in the Times warning against those who have ‘sought to co-opt the Charity Commission into campaigns against think tanks with which they disagree’. Fraser says that while think tanks must be open-minded and not predetermine their conclusions, it does not breach charity law if, for example, a progressive think tank like the Institute for Public Policy Research tends to favour left-of-centre solutions.  
“Similarly, it is entirely legitimate under charity law for the IEA to approach public policy from the classical liberal perspective and propose free market solutions. This perspective is built on hundreds of years and thousands of scholars in the classical liberal tradition. While our output must be reasonably balanced and neutral as an education charity, this is ‘in the round’ across our school of thought. In practice this means we publish various viewpoints, for example, arguing for and against Brexit from a libertarian perspective. It does not mean every utterance, from a social media post to a book, must be opinion-free or cover all ideas at all times — an obviously absurd standard. 
“The Andrew Purkis and the Good Law Project complaint, supported by several politicians, rehashes arguments that have been repeatedly dismissed by the Charity Commission. The simple fact of being ‘controversial’ in the eyes of those who disagree, including some politicians, cannot possibly be against the law. Education and human rights law, the legal underpinning of the relevant charity law, explicitly protects the expression of controversial viewpoints.

“The complaint also raises concerns about links to non-charitable entities, but this structure was recommended by the Charity Commission in 2014 and has been adopted by other think tanks and charities – including Greenpeace and Hope Not Hate. 
“This is why, in response to the complaint, the Charity Commission has unequivocally declared: ‘We have assessed the concerns raised and have not identified concerns that the charity is acting outside of its objects or the Commission’s published guidance.’  
“The complaint’s lack of substance explains the swiftness of its dismissal. Ultimately, all this complaint has done is to confirm (again) that the IEA is acting consistently with its status as an educational charity. We look forward to continuing to advance the public understanding of economic ideas from a free market perspective.”

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