Investigation demanded into TPA linked charity


12:55 pm - December 21st 2009

by Sunny Hundal    


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A charity linked to the TaxPayers’ Alliance is being called into question over its charitable status.

The Guardian today shows that the Politics and Economics Research Trust has charitable status and is being used as a vehicle to claim tax relief for donations to the TaxPayers’ Alliance.

The TPA has very close links with the Conservative Party. According to the Guardian, Midlands businessmen said they channelled funds through the Politics and Economics Research Trust at the request of the Taxpayers’ Alliance.

The Charity Commission’s guidelines state that trustees must not allow the charity to be used as a vehicle for the expression of the political views of any individual trustee or staff member.

Former Deputy PM John Prescott has sent a letter to the Charity Commission calling for an investigation.
He wrote:

Dame Suzi Leather,
Chair,
Charity Commission,
30 Millbank,
London,
SW1P 4DU

December 21 2009

Dear Dame Suzi,

I’m writing to formally request that the Charity Commission launches an investigation into the Politics and Economics Research Trust.

Today’s Guardian says the trust, which has charitable status, is being used as a vehicle to claim tax relief for donations to the TaxPayers’ Alliance, a pressure group with strong political links to the Conservative Party.

The paper states the Charity Commission’s records show the charitable arm was established as the Taxpayers’ Alliance Research Trust in 2007, before changing its name to the Politics and Economics Research Trust.

The TaxPayers’ Alliance Chief Executive Matthew Elliott is named as its main contact and the trustees include leading Taxpayers’ Alliance supporter Patrick Barbour, the founder of Reform, a free-market think-tank, which advocates lower tax and public spending.

Your Charity Commission’s guidelines on campaigning and political activity state, “an organisation will not be charitable if its purposes are political”.

Your guidelines also state that trustees must not allow the charity to be used as a vehicle for the expression of the political views of any individual trustee or staff member.

According to the Guardian, Midlands businessmen said they channelled funds through the Politics and Economics Research Trust at the request of the Taxpayers’ Alliance.

The links between the Conservatives and the TaxPayers’ Alliance are very strong. Major Tory Party donors are also funding the TPA. According to the Guardian, they include Sir Anthony Bamford, the owner of the JCB digger company, and Tony Gallagher, the owner of Gallagher Estates, both Conservative donors, who with 32 other businessmen have donated about £80,000 to the TaxPayers’ Alliance through the Midlands Industrial Council. The MIC has also made donations to the TPA’s charitable arm Politics and Economics Research Trust.

David Wall, the secretary of the Midlands Industrial Council, told the Guardian: “The charitable arm is where specific projects are being researched on specific topics.

“We donated for work they were doing predominantly on congestion charging. When there was talk of it coming to Birmingham, we asked them to look into road charging to see what the likely effect would be on the haulage industry.

“We were asked for funding to the charity, which means they can benefit from gift aid. I know that some industrialists made donations through the charitable arm.”

The Tory links to the TPA’s and the Politics and Economics Research Trust don’t stop with donations.

At their monthly meetings, speakers have included Eric Pickles, the Conservative party chairman, Liam Fox, the shadow defence secretary, and Daniel Hannan, the Tory Eurosceptic MEP who we exposed as claiming the NHS was “a 60-year mistake.”

The TaxPayers’ Alliance has also launched a campaign called “Big Brother Watch” to, and I quote, “fight injustice and protect personal liberties.” According to the Guardian it is being led by David Cameron’s former Chief of Staff Alex Deane.

The purposes of the TaxPayers’s Alliance – and its charitable trust – are quite overtly political, making the Political and Economics Research Trust in clear breach of the Charity Commission’s guidelines.

I therefore call upon the Charity Commission to launch an immediate formal investigation into the Politics and Economics Research Trust and suspend its charitable status forthwith.

I look forward to your reply.

Yours sincerely

John Prescott MP

via LabourList

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Sunny Hundal is editor of LC. Also: on Twitter, at Pickled Politics and Guardian CIF.
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Reader comments


Well, I’m not surprised anyone from this Labour government would have the arse with Big Brother Watch. I will be fascinated to see how BBW behave once the Tories are in power though, because personally I don’t see the civil liberties situation improving at that point – certainly not across the board anyway.

It’ll be interesting to see the outcome of this one but hard not to be bias as the TPA are a big bag of nob.

So I guess that Demos and the new economics foundation (both charities) are not engaged in political activity then?

Odd that the TPA gets singled out, ain’t it?

Not odd at all, what is odd is thinking going LOOK OVER THERE is going to work.

Clearly, as with Zac Goldsmith, there is rank hypocrisy in the TPA making demands about how taxes are procured and spent, whilst seeking to avoid paying them altogether. And there seems a very strong case that the charitable front for the TPA violates the rules of the Charity Commission, by having an agenda that is ‘political’.

That said, and to muddy the waters somewhat, I can’t really think of a charity that isn’t political, insofar as all charities, presumably, have an agenda that they would like to see advanced by legislative means (so, e.g., the RSPCA has an interest in hunting and animal cruelty legislation). So I wonder whether the CC’s rule that bona fide charities must be non-political is really sustainable. It strikes me that what marks out the TPA’s Politics and Economics Research Trust as a bogus charity is not so much that it has political motives, and more that it has nothing to do with anything that anyone would recognise as a genuine good cause. Still, that’s all just by-the-way.

I’m writing to formally request…

Gah…

“The charitable arm is where specific projects are being researched on specific topics.

When there was talk of it [road pricing] coming to Birmingham, we asked them to look into road charging to see what the likely effect would be on the haulage industry.

We were asked for funding to the charity, which means they can benefit from gift aid. I know that some industrialists made donations through the charitable arm.”

There’s no smoking gun here that I can see. The quote above looks like classic think tank charity fodder – educational research into policy. That this is explicitly separated from the more expressly political TPA looks like good practice.

In the case cited above, this group commissioned the TPA to provide some research/analysis into a non-political subject (as defined in the Act) – the impact of road pricing. The TPA said, in effect, ‘this sort of research is covered by our non-contentious wing – send the commission over to them’. Nothing wrong in that that I can see.

The purposes of the TaxPayers’s Alliance – and its charitable trust – are quite overtly political, making the Political and Economics Research Trust in clear breach of the Charity Commission’s guidelines.

Saying it don’t make it so. The TPA isn’t a charity, as far as I’m aware, and it’s perfectly acceptable (and allowed for in law) for it to have an affiliated charitable arm. That titanic brain Prescott is attempting to elide the two as identical but is providing no evidence at all to support that assertion.

Unless there’s more, this looks pretty thin. If, for example, there is evidence of PERT (good acronym…) carrying out expressly party political work, that would be evidence that they were in breach of Charity Commission guidelines. Stating that “charity A is affiliated to non-charity B and since B is non-charitable, so is A” doesn’t wash I’m afraid.

I had a feeling you’d think it was all okay and above board…

Nothing to see here.

“rank hypocrisy in the TPA making demands about how taxes are procured and spent, whilst seeking to avoid paying them altogether.”

Not sure you’ve quite grasped how this carity and tax thing works. The tax relief isn’t on the charity itself. It’s on donations to it.

Imagine that I want to give £100 to the TPA (or Demos, nef, RSPCA, whatever). I don’t in fact send them £100. I send them £80. Then HMRC sends them another £20. For I’ve already paid £20 in tax on the £80 that I’ve got. So HMRC sends the tax I’ve already paid to the charity I’ve donated to. The tax relief is to me, the donor, not the charity itself.

Charitable status doesn’t change the amount of tax that the TPA themselves pay (it could, if they had an investment pot that they were living off but as far as I know they don’t). They’re not making a profit, or trying to, so there’s no Corporation Tax and they pay NI and income tax on salaries just like everyone else. I think they might have a VAT exemption as a charity (anyone know?) but (and I’m really not sure on this point) I think that works to their disbenefit….for it means they cannot claim back VAT on purchases.

7 – if the TPA were a charity (and I don’t think it is) then it would be skating on the very edge of allowability re: political activity. As do many think tanks that are charities (cf arguments here about Policy Exchange, The Smith Institute and so on).

But this looks like they have hived off the non-contentious parts of their research analysis to a charitable entity. And unless you can prove that PERT are in breach of their charitable duties (or that funds for TPA are being laundered through PERT, which would be fraudulent), then there is no story here. Willing to be proved wrong of course…

10. Dick the Prick

Aww – diddums. Those beastly folks at the Tax Payers’ Alliance are playing with funny money – shucks. Adam Smith Institute anyone? Anyone? Pop it in your pipe and smoke it – and for the tax dodging Guardian to break it with a letter from that serial money grabber and sex pest Prescott – well, case closed m’lud.

Nothing to see here…move on…a non-story…

“Not odd at all, what is odd is thinking going LOOK OVER THERE is going to work.”

In this case it is relevant though – why is one particular organisation being singled out?

It doesn’t surprise me you think that Richard, which is fair enough but I think the key word with regards to reason why is hypocrisy but no fear, nothing to see here.

Dick, do tell about the ASI would you? I’ve heard nothing about that…..

14 – I suspect he means The Smith Institute…

“In this case it is relevant though – why is one particular organisation being singled out?”

Well not long ago the TPA and right wing were doing similar with a left wing group – can’t remember who.

This can be explained by game theory – prisoners dilemna stuff. There are political organisations that are set up as charities linked to all the different political viewpoints. Ideally if nobody mentions their suspect charitable status they all gain from this, and if they all mention it everyone loses by the loss of charitable status that follows.

However if one wing mentions the other’s abuse of charity status without their own being found out then that wing gains from the other looking dodgy – so the incentive is to mention it – everyone mentions it and they all lose.

And that sounded a lot clearer in my head before I wrote it (office xmas lunch today).

17. Dick the Prick

Tim – can do. Apparently the Adam Smith Institute held meetings in Number 11 – bit dodgy but vaguely explainable so, yer know, fair enough. However – they seem to have inadvertently paid Ed Balls £89k salary whilst he was working for Gordon Brown – hmm.. perhaps the Jack Straw defence of ‘accountancy isn’t really my forte’ can be used so again, fair enough. Trebles all round!!

Hmm, I’m a Fellow at the Adam Smith Institute and believe me, in the current climate we really wouldn’t get to hold meetings at Number 11. Nor would we pay Ed Balls anything (well, to leave the country and never to darken our doors again, perhaps. I’d certainly fund raise to that end.)

Tim J is right: that’s the Smith Institute you’re talking about, not the Adam Smith Institute. Two entirely different organisations.

19. Dick the Prick

Mae culpa – head just about managing to remember what cheese is used for – glad this year’s nearly over; would turn into a gibbering vegetable with another month of this. Apols again. Hope you all have a loverly Chrimbo & a relaxing new year.

@ Tim Worstall:

“rank hypocrisy in the TPA making demands about how taxes are procured and spent, whilst seeking to avoid paying them altogether.”

Not sure you’ve quite grasped how this carity and tax thing works. The tax relief isn’t on the charity itself. It’s on donations to it.

I’m aware of how it works. Do you think that the impression of hypocrisy is lessened by the fact that the text exemption is on the donations flooding in from wealthy Tory donors, rather than on the body itself? You also appear to have forgotten that one of the directors of the TPA is not resident in the UK for tax…

Nor am I resident in the UK for tax. So?

“Do you think that the impression of hypocrisy is lessened ”

I’m well aware of the “impression” of hypocrisy. That, I’m sure, is why the iriginal article at The Guardian was written. I’m very much less aware of the actuality of hypocrisy. As is said up thread, just about every think tank and campaigning group in the country uses the same structure.

So I guess that Demos and the new economics foundation (both charities) are not engaged in political activity then?

Why not lodge a complaint then if you think there’s something to complain about Tim?

Looking at this story further, it is remarkable how thin it is. Presumably the Guardian have used their strongest lead on this, and look how it pans out:

The MIC donates substantial amounts of money to the TPA, which is not a charity, for research and analysis into politically contentious areas. On one occasion, the MIC were after research and analysis in a non-contentious area. The TPA advised them that in this case, the funds should be directed to their charitable arm. As I said above, that’s good practice.

And that’s basically it. The TPA are right-wing so it’s impossible that they could have a charitable arm without breaching Charities Law. Not much of a story I’m afraid.

Nothing to see here, move on, Tories are never wrong…

Do you think that the impression of hypocrisy is lessened by the fact that the text exemption is on the donations flooding in from wealthy Tory donors

Charity law needs a good look at but at least the TPA are privately funded.

Is it not worse that Government Departments set up and fund various fake charities to lobby them to implement policy changes (with which I may disagree) and they give them some of my money to do so?

24 – tell me why I’m wrong then! I’ve just put the matter how I see it, if you think I’m wrong, tell me how.

The article and piece in question puts the matter how I see it Tonga Tim and as it stands at the mo, we have to wait for further information and findings but what is clear, is that you’d made your mind up pretty sharpish and seemingly, the TPA and their Tory pals can do no wrong.

“Is it not worse that Government Departments set up and fund various fake charities to lobby them to implement policy changes (with which I may disagree) and they give them some of my money to do so?”

Yes. Indeed I think it’s far, far worse.

“Why not lodge a complaint then if you think there’s something to complain about ”

Because I don’t think there’s anything to complain about: none of them are breaking the law as far as I can see.

The only thin I might complain about is the people screaming “Look, look, those nasty righties!” while their own allies get on with exactly the same behaviour every day.

Yes Daniel, but you’ve got to admire the two Tims’ rapid message-management skills.

Admire isn’t the word I’d pick Neil…

30. Yup, the memo from Tory/UKIP HQ flashed across to us pdq.

The letter from John Prescott is a crock. It doesn’t even contain any allegations that would put PERT in breach of its charitable obligations were they proved to be true.

As I said above, if the TPA were a charity, I think they’d be sailing pretty close to the wind on the ‘political purpose’ front. But I don’t think they are a charity, and thus their political affiliations aren’t relevant here. PERT looks as though it’s been set up specifically as a way of carrying out non-contentious research. As such, it’s charitable.

Not having heard of PERT before today, I didn’t have a pre-conceived opinion. I just clearly know substantially more about Charity Law than a man who has been a legislator for over two decades.

30. Yup, the memo from Tory/UKIP HQ flashed across to us pdq.

Protest to much, much?

[insert ‘tongue out’ emoticon here – I know how arsey-prolix you’re apt to get, but I don’t have the time to play today]

John Prescott writes a letter requesting that the Charities Commission opens an investigation, citing a newspaper article which quotes John Prescott. Not co-ordinated or anything.

Furthermore, said article has only one actual accusation: that northern businessmen (presumably not owners of satanic mills) paid money to PERT to undertake research favourable to them. But PERT’s stated role, noted in the report, is to fund research.

Other evidence for PERT’s political status is that it has political trustees. Wow. I’m convinced. No way on earth could these trustees simply support the expansion of knowledge with a slant towards their own political position, which is allowed under the rules.

Maybe I should introduce the staff of the Guardian to the rock group Snunkananse, and in particular their best refrain: ‘Of course it’s f***ing political, everything’s political’. PERT certainly is, as are most charities by nature of their missions. But if John Prescott talking to the Guardian and people paying a charity money to do what the charity says it will do with money is the only evidence of misconduct, then I doubt there is anything wrong here.

Bluntly, the only way this is a story is if the currently unidentified recipients of grants turn out not to be doing the research commissioned and pocketting the money for political purposes. Even if the TPA is commissioned to do the work, it is within the rules so long as the work is to expand knowledge.

@25 Pagar: “Is it not worse that Government Departments set up and fund various fake charities to lobby them to implement policy changes (with which I may disagree) and they give them some of my money to do so?”

1. What is your evidence that Government Departments set up “fake charities”? You know, to actually go out and discover individuals who wish to grasp the crown coin?

2. What criteria would a future Conservative or UKIP government apply to the worthiness of charities? Would government prefer to remain ignorant rather than to deny funding on the basis of politics?

@ 35 Charlie

!) Go to http://fakecharities.org/ and take your pick.

But for starters have a look at Alcohol Concern- less than £5K in public donations and over £500k from the Department of Health. Stated aims

“THE DEVELOPMENT AND IMPLEMENTATION OF ALCOHOL POLICY; RAISING ALCOHOL AWARENESS; PROVIDING QUALITY INFORMATION ON ALCOHOL AND ALCOHOL-RELATED HARM; DEVELOPING THE KNOWLEDGE AND SKILLS OF PRACTITIONERS AND OPERATING A SPECIALIST CONSULTANCY SERVICE; AND DELIVERING PROJECTS THAT BUILD THE CAPACITY OF THE SECTOR.”

That translates as lobbying and scare mongering.

2) I have no idea, but I doubt they will improve matters. For ironic effect, they’ll probably fund the TPA.

In my view, charities should have two characteristics.

Their aim should be to be helpful and the objective should be capable of scrutiny by the Charities Commission.

They should be funded exclusively by voluntary donations. Once they accept public funds, they become, to a greater or lesser extent, agents of the state.

“Once they accept public funds, they become, to a greater or lesser extent, agents of the state.”

Well within the sector this is constantly debated. To what extent can one accept money from the state (be it central or local government) to provide statutory services without compromising your ability to be independant and critical of government. There are still lots of charities that are highly critical of government whilst also providing services funded by the state because they won the tender. On the other hand the example you have given is clearly an example of astroturfing, and the organisation concerned would be more honest in describing themselves as a quango.

But why limit this to charities?

What about private companies that do business with the state? Should they also be regarded as agents of the state?

Suppose, for example, I own a cleaning company and I win the contract to clean the council offices. The contract swiftly becomes 90% of my turnover. Does this mean I am now an agent of the state? The state is clearly in a position to have great influence over – say – my HR and recruitment policies…..

What about a pub strategically located next door to council offices? – clearly most of their trade will be employees of the state spending taxpayers money….

the question is really does taking money from the state mean you become part of the state?

Any similarity between “Once they accept public funds, they become, to a greater or lesser extent, agents of the state” and the sort of crap the closed-shop union leaders used to come out with re. capitalism is, of course, entirely co-incidental… Oh yes…

Nothing to see here Neil…nothing to see…


Reactions: Twitter, blogs
  1. sunny hundal

    There may be trouble ahead… RT @libcon: Investigation demanded into TPA linked charity http://bit.ly/4QptMU

  2. Denny

    I see that @bbw1984 are on Prescott's radar 🙂 http://bit.ly/4QptMU

  3. Leon Green

    RT @pickledpolitics There may be trouble ahead… RT @libcon: Investigation demanded into TPA linked charity http://bit.ly/4QptMU

  4. Liberal Conspiracy

    :: Investigation demanded into TPA linked charity http://bit.ly/4QptMU

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