Lifestyle Economics Blog

The anti-sockpuppet clause

Having written several reports about state-funded activism for the Institute of Economic Affairs, it's pleasing to see the government acting on one of our recommendations. Two weeks ago, Matthew Hancock, the business minister, announced that government grants to external organisations, including charities, will henceforth include a clause prohibiting the funds from being used for campaigning, lobbying and advocacy. Many people will have been surprised to hear that such a basic stipulation was not already in the standard terms and conditions of government contracts, and yet parts of the third sector reacted as if this modest requirement was an existential threat.

Rob Wilson has provided a calm riposte to some of the more hysterical overreactions from state-funded charities and quangos, but a number of myths have begun to take root. A letter to David Cameron drafted by the Association of Chief Executives of Voluntary Organisations asserted that the new clause will ‘prohibit organisations in receipt of grant funding from influencing government or parliament’. This is simply not true. Charities will be as free as they have ever been to lobby and campaign with the money they raise from voluntary donations. It is only the money they receive from taxpayers via grants and contracts that will be restricted.

It is telling that the third sector’s trade associations have chosen to attack a straw man version of the government’s proposals rather than defend state-funded activism directly. Perhaps they are worried that the general public agrees with Matthew Hancock about ‘the farce of government lobbying government’. It doubt the average taxpayer thinks it is Orwellian to expect terms and conditions to be attached when their money is handed to private organisations. If we have learned anything from the Kids Company fiasco, it is that the government cannot carry on dishing out money to charities in the vague hope that it will be spent prudently. Money should be granted for specific services and those services should not include campaigning for pet political projects.

When government gives money to charities it is to commission specific services that the state would otherwise provide itself. It is not unreasonable to expect this money to be spent on those services, rather than on the pet political projects of the charity’s trustees. If a charity wants to run campaigns, start petitions, put up billboards or protest outside parliament, it should do what you or I would have to do and pay for it themselves.  

We have drifted into surreal territory when the refusal to subsidise a special interest group is portrayed as being tantamount to censorship. This is a sector that receives £13 billion from the state every year. If, as critics allege, the government is trying to punish or silence charities, it would simply withdraw funding from those it sees as ideological enemies. A more ruthless administration would surely have done so. Instead, it is setting a basic requirement that taxpayers’ money be spent on the public services taxpayers need, rather than on the public policies charity bosses want.

The notion that the new clause will ‘gag’ charities has already been disproven by Department for Communities and Local Government, which has had a virtually identical clause in its contracts for the last twelve months. Among the charities that have received grants under this revised contract is the homeless charity Shelter which, despite its millions of pounds of state funding, has continued to run prominent political campaigns such as its ‘Power to the Renters’ initiative.

Only in the extreme scenario of a charity that is entirely funded by the government would there be any meaningful restriction on political advocacy. In such instances, lobbying would inevitably be state-funded and would therefore be prohibited, but we might reasonably ask why such an organisation is registered as a charity if it is unable to attract any private donations at all. Such an organisation is, in practice, a government agency and should be viewed as such. In any case, charities of this kind are so rare as to be almost hypothetical. The vast majority of state-funded charities have private donations upon which to draw if they wish to campaign for a political cause.

Some of the arguments made by the big charities in the last fortnight week have been quite incoherent. On the one hand they insist that it is almost unheard of for charities to use public money for advocacy. On the other hand they claim that the new clause will be an unprecedented attack on free speech. Which is it? Each of these propositions cannot both be true. Either state-funded activism is rife, in which case it is about time the government put a stop to it, or it is extremely rare, in which case there is no reason to be concerned about an unwritten rule becoming a written rule. The ferocity of opposition coming from some quarters since the government made its announcement suggests that state-funded campaigning might be rather more common than anyone suspected.
 

Search

Christopher Snowdon
17 December 2014
One hundred years ago today, President Woodrow Wilson approved the Harrison Narcotics Tax Act, the US’s first national legislation designed to control the manufacture, import and supply of...
Christopher Snowdon
11 December 2014
My report about pub closures was generally well received when it was published yesterday, with the notable exception of the All-Party Parliamentary Save The Pub Group, which sent out a bizarre and...
Christopher Snowdon
10 December 2014
The UK has lost 21,000 pubs since 1980, with half of these closures taking place since 2006. In Closing Time, a new IEA report, I estimate that long-term cultural changes have been responsible for...
Christopher Snowdon
1 December 2014
In December 2012, the introduction of plain packaging gave the Australian government full control over the design and appearance of cigarette packs. Tobacco branding was abolished and tobacco...
Christopher Snowdon
10 October 2014
A few weeks ago I found myself being filmed in a New Zealand supermarket searching for a healthy meal for four. The Kiwi equivalent of The One Show wanted me to help them demonstrate how much more...
Christopher Snowdon
9 October 2014
A study was published in PLoS One last year titled 'Economic Instruments for Population Diet and Physical Activity Behaviour Change: A Systematic Scoping Review'. I didn't notice it when...
Christopher Snowdon
16 September 2014
The economist Julian Simon once wrote that ‘the economic study of advertising is not deserving of great attention’, ruefully adding that ‘this is not a congenial point at which to...
Christopher Snowdon
18 August 2014
Obesity prevalence has increased sharply in Britain since the 1970s. Many public health campaigners portray Britain’s obesity ‘epidemic’ as being caused by the increased...
Christopher Snowdon
4 July 2014
The e-cigarette market in Britain has the closest thing to perfect competition that you will see in the real world. Perfect competition is a theoretical economic model but, like most economic models...
Christopher Snowdon
15 June 2014
Alcohol policy in Britain and many other countries aims to reduce per capita alcohol consumption in the belief that this will inevitably reduce heavy and harmful drinking. Campaigners cite the...
Christopher Snowdon
4 June 2014
The US Food and Drug Administration is considering making a calculation of the pleasure that people get from using e-cigarettes and tobacco products. It has suggested that financial estimates of the...
Christopher Snowdon
13 May 2014
The Economist has put a nice little chart together based on the latest World Health Organisation report on alcohol. It shows alcohol consumption per capita but also per drinker. Contrary to...
Christopher Snowdon
1 May 2014
Much of the moral panic about gambling in recent years has centred on the claim that the number of problem gamblers has "increased by 50% in three years" and that the UK has 450,000...
Christopher Snowdon
24 March 2014
The latest installment of the plain packaging saga is expected to arrive before the end of the month. After the initial public consultation found that two-thirds of those who responded were opposed...
Christopher Snowdon
19 March 2014
Today's budget was another curate's egg from the perspective of lifestyle liberty. The decision to scrap the alcohol duty escalator is very welcome, as is the freezing of spirits and cider...
Christopher Snowdon
18 March 2014
The authors of the report that claims that inequality costs the UK £39 billion a year (see yesterday’s post) say that rates of imprisonment would fall by 37 per cent in a ‘more...
Christopher Snowdon
17 March 2014
On Sunday, the Observer reported that ‘Inequality “costs Britain £39bn a year’. This is based on the belief that ‘a more equal UK would experience less crime and...
Christopher Snowdon
18 February 2014
As reported in The Guardian and elsewhere, the Alcohol Health Alliance has issued a press release in response to the ongoing campaign to bring an end to the alcohol duty escalator which, according to...
Christopher Snowdon
5 February 2014
In June 2012, the IEA published Sock Puppets, a report which looked at the evidence, and implications, of taxpayer funding for the large and growing element of ‘civil society’ that is...
Christopher Snowdon
4 February 2014
The French think tank Institut économique Molinari has recently published a clear and well-referenced report that looks at the false premises and negative consequences associated with sin...

Invest in the IEA. We are the catalyst for changing consensus and influencing public debate.

Donate now

Thank you for
your support

Subscribe to
publications

Subscribe

eNEWSLETTER