The Institute of Economic Affairs (IEA), the anti-state pressure group, must implement reforms to be more transparent and less politically biased, according to the charities regulator.

The Charity Commission launched an investigation into the IEA in May, based on “perceptions of potential political bias, perceptions of a potential lack of transparency around funding, and perceptions that the charity may have pre-determined policy positions which would not be in keeping with its charitable purposes to advance education.”

In response to the Good Law Project (GLP), which made the original complaint alongside a cross-party group of MPs, the regulator stated that the IEA had provided evidence that demonstrated “a significant change in approach since it changed chair and director general / CEO in 2023; with a greater push for greater transparency and political neutrality.”

The Charity Commission added that the IEA “needs now to deliver on its plans and implement these changes.”

However, the IEA has today announced that it has appointed Lord Frost, until recently a Conservative peer and the director of a climate science denial group, as its new director-general.

The IEA is registered as a charity, and the regulator states that “political activity must not become the reason for the charity’s existence.”

The IEA is part of the Tufton Street network – an orchestrated alliance of radical right-wing groups based in Westminster that lobby to dismantle state services and privatise public bodies. These groups share an opposition to climate action, and have spent decades attempting to undermine the scientific consensus behind policies to reduce emissions.

The group is a prominent supporter of the continued and extended use of fossil fuels. It has advocated for the ban to be lifted on fracking for shale gas, calling it the “moral and economic choice”, has said that a ban on new North Sea oil and gas licences would be “madness”, has criticised the windfall tax imposed by the UK on fossil fuel firms, and has celebrated the Conservative Party’s pledge to scrap the 2008 Climate Change Act.

Despite the Charity Commission’s demand for greater transparency, the IEA still doesn’t publicly declare the names of its donors.

Greenpeace’s investigative outlet Unearthed previously revealed that the IEA had received money from BP every year from 1967 to 2018. The IEA also received a £21,000 grant from U.S. oil major ExxonMobil in 2005.

Investigations have also discovered that a number of IEA donors are connected to the Conservative Party and other climate science denial groups in the Tufton Street network.

Conservative donors Nigel Vinson, Lord Hintze, and Lord Moynihan have all donated to both the IEA and the Global Warming Policy Foundation (GWPF) – the UK’s foremost climate science denial group, based in 55 Tufton Street.

Neil Record, one of Tory leader Kemi Badenoch’s closest allies and donors, is the chair of the GWPF’s campaign arm, Net Zero Watch, and is the life vice president of the IEA.

From 2009 to 2024, the IEA was run by Mark Littlewood – a close ally of former Prime Minister Liz Truss, who lasted just 45 days in the job after she implemented a series of disastrous economic reforms backed by the IEA.

However, there is also little evidence that the IEA has adopted a more neutral stance following Littlewood’s departure, in contravention of the Charity Commission’s conclusions.

On 2 October, the IEA said it was “fantastic news” that the Conservative Party had pledged to scrap the 2008 Climate Change Act, which formalised the UK’s 2050 net zero emissions target. “This is an encouraging first step back to sanity,” it said.

A day earlier, the group slammed Net Zero Secretary Ed Miliband’s energy and climate agenda, stating: “The government is delivering higher prices, higher taxes, higher emissions, higher interest rates, lower investor confidence, and elevated risks to energy security.
 
 “Earlier in the week, the minister said he didn’t like billionaires very much. We can agree on one thing: he will ensure very few will wish to live here and pay his taxes.”

These statements don’t seem to conform with the IEA’s promise to be less politically biased.

The IEA has today appointed Lord Frost, a director of Net Zero Watch, as its new director-general following the resignation of Tom Clougherty. Frost has sat as a Conservative peer since 2020, but will now resign the Tory whip.

Linda Edwards, the IEA’s CEO, responded to the Charity Commission’s findings by saying: “The institutions of a free society and free markets are threatened across the free world. Vexatious campaigns like this attempt to destroy ideas, rather than debate them.”

Edwards is a board member at Atlas Network, a Washington-based umbrella organisation that supports over 500 “free market” groups around the world. DeSmog revealed that Atlas was paid tens of thousands of dollars by oil major ExxonMobil to stoke confusion and doubt about climate change among developing nations during critical early moments of climate diplomacy.

The IEA and Atlas were both founded by Antony Fisher.

“Whilst we are pleased the Charity Commission recognised the need for formal guidance to the Liz Truss IEA,” said Jo Maugham, executive director of the GLP, “we think it is – not for the first time – remarkably complacent in believing the leopard of 55 Tufton Street will change its spots. We will not let the matter rest here, and are consulting with our lawyers.”

A previous case brought against the GWPF didn’t lead to any meaningful sanctions against the Tufton Street group.

The GLP accused the GWPF of breaching charity law by spending hundreds of thousands of pounds on one-sided research attacking climate science, and by funding the lobbying activities of its campaign arm Net Zero Watch. However, the Charity Commission asked the GWPF to make only minor changes to its ownership structure and output.