Established in 1955, the Institute of Economic Affairs (IEA) is less of a think tank and more a pressure-group for an ultra-right, extreme liberal approach to the economy. If honest, its mission statement might be ‘Driving the neoliberal agenda since 1955’. Its roots lie in attempts to oppose the Attlee-Bevan move to the left after the Second World War that brought us the National Health Service and the welfare state. Its mission is to promote small government and freedom for so-called ‘wealth creators’ (in other words, ultra-rich individuals and corporations).
The IEA was established by old Etonian Anthony Fisher, who became a millionaire by introducing battery chicken farming to the UK. He also established the Atlas Network, based in the US, which funds a global network of libertarian think tanks that ‘share a vision of a free, prosperous and peaceful world where the rule of law, private property and free markets are defended by governments whose powers are limited’.
Questions have long been raised about the funding of the IEA, which has for some time been accorded the lowest transparency rating by campaign group ‘Who Funds You?’ As George Monbiot argues in his dissection of the IEA, it is this sort of dark money that is undermining our democracy.
Specifically, in the latest cabinet reshuffle, two top ministers Dominic Raab and Matthew Hancock, have been promoted to the frontbench. Monbiot highlights the significance of this showing how ‘Raab credits the IEA with supporting him “in waging the war of ideas”’ and that ‘Hancock, in his former role as cabinet office minister, notoriously ruled that charities receiving public funds should not be allowed to lobby the government. His department credited the IEA with the research that prompted the policy. This rule, in effect, granted a monopoly on lobbying to groups such as the IEA, which receive their money only from private sources. Hancock has received a total of £32,000 in political donations from the IEA’s chairman, Neil Record.’
So what do we know about their funding? Investigations by Open Democracy have revealed that funding from donors including US tobacco firms seeking to avoid tighter regulation, support of more than £500,000 from the US through the American Friends of the IEA, which was set up to enable donations from US-based corporations and individuals, and a similar amount from the Templeton Foundation, which lobbies for health care privatisation.
Needless to say, the luminaries of the IEA saw Brexit as an enormous opportunity. Although they were a little slow off the mark compared to some of the other lobbyists, when they established their Brexit Unit in June 2017 they crowed:
‘Brexit provides a once-in-a-generation opportunity to create a more flexible, open and vibrant economy and set a shining example for other countries. But a positive outcome is not guaranteed. Brexit could actually lead to more bureaucracy and protectionism rather than less, especially with all major political parties in the UK now proposing a bigger role for the state.’
The IEA’s purpose in setting up their unit was clearly to ensure that Brexit means less ‘bureaucracy’, for which read tearing up protective legislation, and less ‘protectionism’, for which read signing up for trade deals that lower environmental and consumer standards.
The IEA’s Brexit Unit was originally headed up by Julian Jessop. Jessop is something of a man of mystery, with a sparse online profile. As Director of Capital Economics, he rubs shoulders with its founder Roger Bootle, one of the few economists who sees anything to celebrate in Brexit and a member of Economists for Free Trade.
In March 2018, as questions about the anti-democratic influence of the Legatum Institute were growing louder, Shanker Singham and three of his team from Legatum moved to the IEA to establish a new unit officially titled the International Trade and Competition Unit, with Singham as director. Singham had enjoyed privileged access to DExEU ministers including David Davis and Boris Johnson and repeated meetings with Philip Rycroft, the permanent secretary. These meetings were not minuted.
Singham is acknowledged to have coordinated political strategy to pressure the Prime Minister to stick to the hard Brexit line. The Mail on Sunday suggested that Singham was involved in drawing up the Brexit ultimatum launched by Boris Johnson and Michael Gove in November 2017, together with Chandler, successfully deflecting the Prime Minister from her course towards a softer Brexit.
According to City AM, quoting an anonymous Westminster insider, there was delight in the Brexit camp when Singham moved to the IEA:
‘This is amazing news and will get the Brexit process back on track. The guys on the clean Brexit side will have the arguments they need to push civil service to do exactly that and push against [Remainers] like Philip Hammond.’
‘One of the reasons things started to go off track a bit towards late 2017 and early 2018 was because Shanker wasn’t there to keep things on track […but…] ministers rely on outsiders such as Shanker to point out things civil servants have missed out, or where they’ve tried to pull wool over eyes.’
The IEA’s trans-Atlantic leanings have come to the fore since the Brexit vote, with Shanker Singham joining up with Daniel Hannan from the Initiative for Free Trade (IFT) to strengthen ties with the right-wing Cato Institute’s Trade Policy Unit. The IFT has published a vision of what it considers UK-US trade arrangements should look like after Brexit. It described how this initiative would be rolled out:
‘In a unique exercise that will bring together all the major conservative and free-market think tanks on both sides of the Atlantic’ the draft trade paper ‘will then become the subject of two rounds of simulated trade talks (one in London, one in Washington DC) between delegates from these think tanks’.
Almost as if we didn’t need politicians at all. The exercise recalls President Donald Trump’s promise to Theresa May when they met in July 2017 that the US has ‘been working on a trade deal which will be a very, very big deal, a very powerful deal, great for both countries and I think we will have that done very, very quickly.’ As Trump himself has often implied, trade talks can happen so much more quickly when they are based on a ‘deal’ between two authoritarians.
In June 2018 IEA hired Darren Grimes as its digital manager. Grimes, who had worked for Brexit Central, was the subject of an Electoral Commission investigation in relation to a £625,000 donation from Vote Leave to the student campaign BeLeave he ran during the Brexit referendum. In July 2018 the Electoral Commission announced that Grimes had ‘committed two offences and has been fined £20,000. Mr Grimes spent more than £675,000 on behalf of BeLeave, a non-registered campaigner that had a spending limit of £10,000. Further, he wrongly reported that same spending as his own’. Grimes and the responsible person for Vote Leave were both referred to the Metropolitan Police.
The IEA’s influence had a boost in the Cabinet reshuffle of July 2018, which saw Matt Hancock and Dominic Raab elevated. Hancock was heavily criticised in 2016 for accepting a £4,000 donation from the IEA’s chairman shortly after announcing stricter controls on lobbying by think tanks (a policy that was later dropped).
Raab – David Davis’s replacement as Brexit Secretary – is also a longstanding protégé of the IEA. His 2009 book The Assault on Liberty was launched at their offices and he credited the IEA for his policy suggestions such as abolishing workers’ rights and creating for-profit schools: ‘it was the IEA which supported us in waging the war of ideas and launching that book.’
The IEA recently hosted the launch of ‘Freer’ , a parliamentary lobby group founded by Liz Truss MP with which the IEA shares staff and facilities. The launch was attended by cabinet ministers including Truss, Michael Gove and Brexit Secretary Dominic Raab, who prioritised this event over the Brexit negotiations taking place at the same time in Brussels. Freer’s membership includes both the current and the former chair of the ERG, Jacob Rees-Mogg and Steve Baker
— IEA (@iealondon) March 19, 2018
Astonishingly, the IEA remains registered as an educational charity (which exempts it from certain taxes), with the official purpose of helping ‘the general public/mankind’.
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