Charity Commission issues official warning to IEA over legal breaches in Brexit report
The charities regulator has issued an official warning to the Institute of Economic Affairs (IEA) for breaking charity law in a report about Brexit.
The Charity Commission today censured the Westminster think tank for a report into the post-Brexit economy in the UK, which was published in September but has since been taken down.
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The regulator said the report and an associated launch event breached charity law, adding that the offences amounted to “misconduct and mismanagement on the part of the trustees”.
The think tank, which promotes free market policies and a clean break from the EU, has said it is “disappointed” at the findings.
In the warning the Commission stated the publication breached its rules on campaigning by explicitly seeking to change government policy on an issue unrelated to the purposes of the IEA, which is an educational charity.
It also said the report and the launch event did not meet the necessary standards of balance and neutrality.
While the regulator acknowledged educational think tanks do not need to be completely neutral, it said reports must present balanced information and allow the reader to draw his or her own conclusions.
David Holdsworth, deputy chief executive at the Charity Commission, said: “Charitable think tanks are charities and need to behave as such, including by complying at all times with charity law.
“I hope that our official warning now encourages the trustees of the IEA to recognise and understand that they must run the organisation as a charity, and comply with charity law.”
The Charity Commission has called on the IEA to provide written assurances that it will not engage in political activity that breaks its rules.
It has also told the think tank to set up a process to ensure future publications and other activities further its purpose as an educational charity.
Failure to address the issues raised in the warning would be grounds for more serious action, such as the suspension of trustees, the regulator said.
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IEA chairman Neil Record, a former economist at the Bank of England, said: “The IEA is considering a range of options, as we believe this warning has extremely widespread and worrying implications for the whole of the think tank and educational charity sector.”
“A precedent is being set: research papers – and their launches – which put forward policy proposals may now fall outside the parameters of what the Charity Commission considers acceptable activity,” he added.