12 months after her shambolic premiership commenced, we look at the lasting impact of our shortest-serving PM’s disastrous attempt to remould Britain into a low tax, deregulated economy.
Lettuce complains about being compared to Liz Truss.
Liz Truss. A political figure you are probably trying to forget, but a reminder that the short-term actions of politicians can have long-term outcomes. She was the prime minister who started her No 10. tenure on September 6, 2022, and oversaw a catastrophically unfunded, tax-cutting ‘mini’ budget, which cost the country a staggering £30bn. She then set about making a series of screeching U-turns and abandoned her entire policy programme, as she battled to settle the market meltdown and save her own skin.
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One year on after Truss took office and mortgage rates have hit a 15-year high, inflation remains uncomfortably high, and the growth the UK’s shortest-serving PM promised is nowhere to be seen, as millions fret about how they will afford their bills when winter comes.
After criticism that the Tory government was ‘rudderless’ in the face of soaring inflation, Liz Truss promised to make tackling the cost-of-living crisis her number one priority if she became PM. Recession is ‘not inevitable’ she had said as she pushed to stand out in the crowd of hopefuls during last summer’s Tory leadership campaign.
Instead of helping Britons tackle soaring living costs, Truss, together with her chancellor Kwasi Kwarteng, managed to do the exact opposite.
The sweeping tax cuts announced by Kwarteng triggered investor panic over the future health of the UK economy. The mini-budget (called ‘mini’ instead of just ‘budget’ to avoid scrutiny by the Office for Budget Responsibility) prompted a sharp fall in the value of the pound and drove up government borrowing costs.
Boris Johnson confirms his thumbs up from Rupert Murdoch
Our investigation reveals secretive funding sources for think tanks that boast of influencing the government
Influential right-wing UK think tanks with close access to ministers have received millions in ‘dark money’ donations from the US, openDemocracy can reveal.
The TaxPayers’ Alliance, the Institute of Economic Affairs (IEA), Policy Exchange, the Adam Smith Institute and the Legatum Institute have raised $9m from American donors since 2012. Of this, at least $6m has been channelled to the UK, according to tax returns filed with US authorities – representing 11% of the think tanks’ total UK receipts, with the figure reaching 23% for the Adam Smith Institute.
In that time, all five have steadily increased their connections in the heart of government. Between them, they have secured more than 100 meetings with ministers and more than a dozen of their former staff have joined Boris Johnson’s government as special advisers.
Representatives from right-wing think tanks – many of whom are headquartered at 55 Tufton Street in central London – frequently appear in British media and have been credited with pushing the Tories further to the right on Brexit and the economy.
As openDemocracy revealed yesterday, ExxonMobil gave Policy Exchange $30,000 in 2017. The think tank went on to recommend the creation of a new anti-protest law targeting the likes of Extinction Rebellion, which became the Police, Crime, Sentencing and Courts Act 2022.
None of these think tanks disclose their UK donors. With the exception of the Adam Smith Institute, none provide any information about the identity of donors to their US fundraising arms.
But an investigation by openDemocracy has identified dozens of the groups’ US funders by analysing more than 100 publicly available tax filings.
The Scottish National Party MP Alyn Smith said that the findings showed that the UK’s lobbying laws were not tough enough.
“He who pays the piper calls the tune,” he told openDemocracy. “We urgently need to rewrite the laws governing this sort of sock puppet funding so that we can see who speaks for who.”
Last month, Smith asked an IEA representative who funded the think tank on BBC’s flagship question time show.
Among the US-organisations who have donated to UK think tanks are oil companies and several of the top funders of climate change denial in the US.
The think tanks’ US arms received $5.4m from 18 donors who have also separately donated a combined $584m towards a vast network of organisations promoting climate denial in the US between 2003 to 2018, according to research from climate scientists.
The John Templeton Foundation, founded by the late billionaire American-British investor, has donated almost $2m to the US arms of the Adam Smith Institute and the IEA. Researchers claim that the John Templeton Foundation has a “history of funding what could be seen as anti-science activities and groups (particularly concerning climate-change and stem-cell research)”.
The National Philanthropic Trust, a multi-billion-dollar fund that does not disclose its own donors, has given almost $2m to the IEA, Policy Exchange, TaxPayers’ Alliance and the Legatum Institute’s US fundraisers. The trust has donated $22m to climate denial organisations, one of which described it as a “vehicle” for funnelling anonymous donations from the fossil fuel industry.
The Sarah Scaife Foundation, founded by the billionaire heir to an oil and banking fortune, has given $350,000 to the Adam Smith Institute and the Legatum Institute. The foundation is one of the biggest funders of climate denial in the US, contributing more than $120m to 50 organisations promoting climate denial since 2012. Last month, openDemocracy revealed that the foundation, which has $30m in shares in fossil fuel companies, gave $210,525 to a UK climate sceptic group.
Policy Exchange, the influential conservative think tank, published a report in 2019 – two years after taking money from ExxonMobil – claiming that Extinction Rebellion were “extremists” and calling for the government to introduce new laws to crack down on the climate protest group.
New anti-protest laws passed under the Police, Crime, Sentencing and Courts Act last month appear to have been directly inspired by the report. The Home Office did not deny that it considered the recommendations when approached for comment.
The American Friends of the IEA also received a $50,000 donation from ExxonMobil in 2004, while the main UK branch of the IEA has received donations from BP every year since 1967.
The Legatum Institute has received $154,000 from the Charles Koch Foundation in 2018 and 2019. The foundation was set up by the American billionaire co-owner of Koch Industries, one the biggest fossil fuel companies in the US.
Andy Rowell, co-author of “A Quiet Word: Lobbying, Crony Capitalism and Broken Politics in Britain”, told openDemocracy: “For years, there have been calls for think tanks, who are so often joined at the hip with government, to be transparent and disclose who funds them.
“The fact that so much dark money is behind these groups, and much of it is linked to climate denial groups, is a political scandal that can’t be allowed to continue, especially given our climate emergency.”
In all, US donors account for more than a tenth of the overall income of the IEA, Policy Exchange, Adam Smith Institute and TaxPayers’ Alliance.
Anti-green lobbying
While all the think tanks say they do not dispute the science on climate change, many are campaigning to increase the UK’s dependency on fossil fuels and deregulate energy markets in response to the cost of living crisis.
The TaxPayers’ Alliance, Adam Smith Institute and the IEA have all called for the UK’s ban on fracking to be overturned. In April, the government agreed to review the moratorium it had imposed in 2019, when scientists deemed fracking unsafe. The U-turn came after concerted pressure from anti-net zero Tory MPs and lobby groups.
The IEA has also called for the government to approve the opening of a new coal mine in Cumbria, while the TaxPayers’ Alliance has called for the government to scrap green energy bill levies. Tory MP Ben Bradley has cited the TaxPayers’ Alliance in Parliament while claiming that levies will exacerbate the cost of living crisis.
Environmental groups say cutting the levies, which are used to invest in energy efficiency measures and renewable energy, would be self-defeating and merely delay the UK’s longer-term transition away from fossil fuels.
Johnson’s think tank cabinet
Right-wing think tanks like the IEA have come to play an increasingly influential role in shaping British politics, despite the lack of transparency around their funding.
The IEA has boasted that 14 members of Boris Johnson’s cabinet – including the home secretary Priti Patel, the foreign secretary Liz Truss and the business secretary Kwasi Kwarteng, are “alumni of IEA initiatives”.
Ministers have recorded 26 meetings with the think tank since 2012, but there may be additional, undeclared private meetings. In 2020, Truss, who was then the secretary of state for trade, failed to declare two meetings with the IEA, arguing that they were made in a personal capacity.
Mark Littlewood, the director of the IEA, has boasted of securing access to ministers and MPs for his corporate clients, including BP, telling an undercover reporter in 2018 that he was in “the Brexit influencing game”.
Others like Policy Exchange, which was co-founded by the ‘levelling up’ secretary Michael Gove, can claim to have had some of their policy ideas taken up by the government.
Gove’s recently announced plan to allow residents to vote on whether to allow developments on their street was first proposed by Policy Exchange last year. Campaigners said the plan will not help increase the supply of affordable housing.
Several of the think tanks were accused by a whistleblower of coordinating with one another to advocate for a hard break from the European Union following the referendum vote.
Shamir Sanni, a former pro-Brexit campaigner who worked for TaxPayers’ Alliance before going public with his claims, alleged that the organisation regularly met with the IEA, the Adam Smith Institute to agree on a common line on issues relating to Brexit.
Sanni subsequently won an unfair dismissal case against the TaxPayers’ Alliance. The organisations he identified have all denied they act as lobbyists or coordinate.
I’m trying to get a handle on the Heritage Foundation and whether it has influence over UK Tory politicians e.g. through the Institute of Economic Affairs. Liz Truss and Krazy Kwarteng were strongly influenced by the IEA.
It’s clear that the Heritage Foundation has had huge influence in US politics since the Regan administration, with huge influence during Trump’s presidency. It’s part of the mechanism of plutocracy whereby the rich and powerful dominate politics instead of representative democracy. I’m chasing this mostly because of Heritage Foundation’s climate-destroying policies and whether this is what Rishi Sunak is following.
16/8 This is taking some time, plenty of info available, on the case. X
The new free market ‘taskforce’ is almost entirely made up of senior figures from US and UK think tanks who have been funded by fossil fuels, climate change deniers, and more.
Liz Truss was back in the headlines this week, when she appeared at the launch of a new lobby group called the Growth Commission on Wednesday.
Some commentators pointed out the irony of a prime minister who tanked the pound – and failed to outlast a lettuce – saying that her widely criticised mini budget “may pay off in the long term”.
Truss’s acolytes, on the other hand, lapped it up. Conservative MP Simon Clarke was even given a column in the Timesto talk up the Growth Commission.
But what is the Growth Commission? And, more importantly, who is funding it?
I decided to take a look. And guess what? The self-styled free market task force seems to be yet another dark money outfit in British politics – led by senior figures from US and UK free market think tanks who have been funded by fossil fuels, the Koch Brothers, climate change deniers, the tobacco industry and much more.
A spokesman for the commission told me that it is funded by donations from private individuals. It wouldn’t give any names.
You might expect that after the disaster of Truss’s short-lived free market experiment, the Institute of Economic Affairs (IEA) would be keeping a low profile. But you’d be wrong.
The IEA is the oldest think tank in Britain, with a history of taking money from tobacco companies, big oil, and has received millions from foundations funded by US billionaires, some of which have been among the biggest sponsors of climate change denial.
The 13 ‘commissioners’ listed on the Growth Commission website – Truss is not one of them – include two IEA veterans: Truss’s former advisor Shanker Singham, and IEA Economics Fellow Julian Jessop.
The Growth Commission describes Singham as “one of the world’s leading international trade experts”. (Some trade experts have disagreed.)
What is indisputable is that Singham is among the most active lobbyists on the free market right in Britain. In recent years, Singham has worked for Legatum, then the IEA, earning rebukes from the Charity Commission for his Brexit trade papers at both Legatum and the IEA.
Singham also runs his own lobbying firm called Competere. Competere doesn’t list its clients, but it has had over a dozen meetings with government ministers in less than two years.
I have sent Freedom of Information requests about many of Competere’s meetings, and I am still waiting for information. (Full disclosure: Singham previously stepped down as an advisor to then International Trade secretary Liam Fox in 2018 after I revealed he had also taken a job with a lobbying outfit.)
‘Ground Zero for Deregulation’
Almost a quarter of the Growth Commission is made up staff from the Mercatus Center, a right wing think tank operating out of George Mason University that has been described as “ground zero for deregulation policy in Washington”.
The chairman of the Mercatus Center, Tyler Cowen, and Mercatus Centre fellows Alden Abbott and Christine McDaniel are all listed on the Growth Commission.
Founded in 1978 by a former vice-president of Koch Industries – a serial funder of climate science denial – Mercatus has been particularly active in pushing for environmental deregulation.
Mercatus has previously suggested that climate change is “beneficial” and “making humans better off” and recommended “work to facilitate movement of people from areas likely to be harmed by climate change” instead of lowering emissions.
Another Growth Commissioner, Ewen Stewart, is director of Global Britain, a Eurosceptic think tank co-founded by former UKIP leader Malcolm (Lord) Pearson.
Stewart’s co-director at Global British, former Scottish Tory Member of Scottish Parliament Brian Montieth, was behind a slew of dark money funded Facebook ads in the run-up to the 2021 Scottish parliamentary elections.
Meanwhile, commissioner Stephen J. Entin comes from the US-based Tax Foundation, which has been heavily bankrolled by the Koch Brothers, who also heavily funded influential Washington right wing think tanks such as the Heritage Foundation, Cato Institute, and Americans for Prosperity.
‘Victim of a Political Conspiracy’
Truss is a big fan of US conservative think tanks: in April, she gave a speech at the Heritage Foundation in Washington in which she praised Ronald Reagan and Margaret Thatcher and portrayed herself as a victim of a political conspiracy.
I asked the Growth Commission who its funders were and was told: “Commissioners serve voluntarily, with travel expenses and costs for auxiliary support like report printing covered by the Growth Initiative Ltd, which receives donations from private individuals.”
The Growth Commission would not say what private donations it had received, but it did correct its website after I asked for evidence for the claim that commissioner Srinivasa Rangan currently held a position at Harvard. (He had previously been attached to the university.)
Rangan is currently a professor at Babson College, a private business school near Boston where Shanker Singham was previously based. Singham led a project that aimed to create low-tax, privatised ‘enterprise cities’ across the globe.
The Growth Commission has said that rather than outlining policy suggestions it will focus on analysis around ‘large scale fiscal events’.
Presumably this will include climate change. Truss has long been a firm friend of the fossil fuel industry. Her Tory leadership campaign took £100,000 from the wife of a former BP executive. She has backed fracking (and been backed by fracking interests), and more. (George Monbiot has an excellent run through of Truss’s environmental positions here.)
Wonder what position the Growth Commission will take on climate?
This article was originally published on Peter Geoghegan’s Substack, Democracy for Sale.
Tom Brake is the Director of Unlock Democracy which campaigns for real democracy in the UK, protected by a written constitution.
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The connection between Truss and the IEA goes back a long way: according to Tim Montgomerie, the founder of Conservative Home, the IEA had “incubated” Truss – and her key ally, former chancellor Kwasi Kwarteng – when they were junior MPs. With their assumption of high office, Britain was to become a “laboratory” for the IEA’s ideas, he said.
Although Truss’ relationship with the IEA is remarkable for its extreme proximity, politicians being close to particular institutions is nothing new. Politicians often find themselves drawn to particular interests and ideas, and so will gravitate toward institutions that reinforce or augment their thinking.
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There is no requirement, either, for think tanks to be transparent about the sources of their funding. In fact, for some, it is impossible to find out who their big donors are. A comparative assessment of the transparency ratings of various think tanks can be viewed here: Unlock Democracy has the highest rating of openness; the IEA, meanwhile, has the lowest rating.
Without being able to follow the money, we cannot hope to understand the interests (commercial or national) that may underpin donations to think tanks, or determine whether those giving money are based in the UK. While it is expected that any foreign funds are most likely to come from rich donors or corporations rather than foreign governments, these donors may still have very close links with a foreign government and seek to shape UK policy in line with the interests of those Governments. Without the data, we just don’t know.
If a think tank advocates for a more relaxed attitude to climate change, the public, the media and Ministers are likely to scrutinise their proposals more carefully if they can see that an oil company is one of its major donors. The same can be said for a think tank that opposes measures to cut smoking when a tobacco manufacturer contributes a significant sum to its budget. Without full transparency of funding – something which the Government has already committed to ensure for the tobacco industry but has not yet delivered – this scrutiny cannot be guaranteed.
