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Questions over the political independence of a charitable
“think-tank” led to a warning that it should stop holding seminars
at 11 Downing Street. The charity commission repeatedly warned the Smith institute,
which was founded in memory of the late Labour party leader, John Smith, about
its frequent use of the chancellor’s official base in Downing Street.
The Smith institute stands accused of promoting the political objectives
of the chancellor, Gordon Brown – an accusation it denies – but
one that is encouraged by its frequent use of 11 Downing Street.
Documents revealed under the freedom of inform-ation act (FOIA) show
that this use of No11 was one of several concerns raised with the Smith institute
by the charity commission, which regulates charities. It questioned whether
the think-tank was really promoting a political purpose rather than being
a charity, a status that gives it tax and other advantages.
A report on BBC2’s Newsnight earlier this month said
that the Smith institute told the programme that it estimated that it had
held more than 200 meetings at No11 since 1999. Newsnight also said that more
than 12 of the meetings took place in the past six months, which compares
with nine held by all other charities combined.
The Smith institute insists that it is promoting an educational, not
political purpose, and so entitled to charitable status.
Over a period of a more than a year from 2001 to 2002, it took several
measures to address some of the charities commission’s concerns. However,
it refused to stop using 11 Downing Street as a venue.
In response, the charity commission closed the case but warned that
it would need to be vigilant to ensure the distinction between promoting an
educational cause as meant under charity law and a political one.
The charity commission last year re-opened the case after the Smith
institute confirmed employing Ed Balls, Brown's former economic adviser, as
a paid research fellow in 2004 and 2005 when he was preparing to stand for
parliament in the general election.
The think-tank is reportedly playing a key role in preparations for
Brown’s “government-in-waiting”, ready for when Tony Blair
resigns as prime minister.
The documents relating to the earlier case shows that the charity commission
began asking questions of the Smith institute in February 2001. It arranged
a meeting for July 2001 so that it could raise “a number of concerns”
with the board of trustees of the Smith institute and its director, Wilf Stevenson.
The trustees at that stage were Lord Haskel, who is also the chairman of the
board, Lord Joffe, Baroness Ramsay and Baroness Rendell.
Before the meeting, the commission said in a letter: “There are
two main areas in which we have identified concerns. Firstly, the extent to
which the publications produced by the charity further the objects of the
charity and secondly, the political nature of the content of the material.”
“When the charity applied for registration [in 1997], the potential
for political bias was raised. We were assured by the promoters that the research
undertaken was not biased in favour of any political viewpoint and that it
was intended to inform and stimulate discussion across the political spectrum.
“In practice, the charity’s programme of work app-ears
to have been largely based on the economic philosophies of the late John Smith
MP. We are concerned that the political theories being advanced through the
work undertaken by the institute may be fostering a climate of opinion for
a political cause. This would not be acceptable activity for a charity.”
Minutes of the meeting, also released under FOIA, show that the charity
commission questioned the Smith Institute’s use of 11 Downing Street.
The minutes say: “If SI's [Smith Institute's] purpose is to advance
education in the charity law sense, why do they have their seminars almost
always in 11 Downing Street and use senior Labour politicians to write forewords
etc as this will undoubtedly link SI with the Labour Party in the minds of
the public?
“The perception will be that it is the policy think-tank for
the Labour Party.”
“SI responded by saying that 11 Downing Street is a beautiful
building and by holding it there, they can ensure a good turnout. People go
there because they want to see the rooms. They are pleased to have such eminent
people write forewords.”
The trustees said that the “sole purpose” of the Smith
institute was “to advance education”, and “although the
starting point had been John Smith’s philosophy and [it] had been set
up in his memory, [it] had moved on and expanded on this.”
They said that seminars “were usually held at 11 Downing Street”,
attended by between 50 and 70 people.
The Smith institute is “absolutely” educational, the trustees
stressed. “The Smith institute works hard to ensure that all shades
of political opinion are covered by selecting a wide range of speakers, and
ensuring that invitations to seminars are made widely available.”
After the meeting, the charity commission sent a follow-up letter,
saying: “The commission remains concerned that the Smith institute is
pursuing a non-charitable purpose by promoting a particular point of view.
We are also not satisfied that its activities could be said to be advancing
education in the charitable sense of the word.”
It set out factors “which suggest that the Smith institute does
have a purpose to promote a particular point of view.”
“When looked at objectively, the choice of seminar topics appear
to have a political flavour, for example, ‘New Britain’, is a
phrase used by a political party in explaining a policy view.”
It questioned the fact that prominent members of the Labour party had
written forewords to some of its books.
“We acknowledge that holding seminars at 11 Downing Street will
attract people to them, but, in our view, so would many other London venues
which do not have such a strong political link.”
The commission pointed to “the strength of the links with the
Labour party” and was unconvinced by the institute’s claim that
it had “moved on” from “John Smith’s philosophy”.
“In conclusion, we remain unsatisfied that the Smith institute
is carrying out its charitable purpose and concerned that in fact it carries
out a non-charitable purpose, and that, accordingly, the trustees may be in
breach of trust.”
It asked the Smith institute to consider taking measures to ensure
that it carries out its charitable purpose, including “a decision to
hold the seminars at neutral venues away from the political arena,”
and introducing trustees independent from the Labour party.
Stevenson replied by pressing the Smith instit-ute’s case that
it does not have a political purpose but was “advancing education in
the charitable sense of the word.”
However, he said: “We accept that there may be advantage in making
it clearer that we are not an institute that some people might inadvertently
assume is simply ‘promoting the thoughts of John Smith’.”
The trustees considered re-naming itself the “fairness and equality
think-tank”, but later dropped the idea.
It did, however, decide to appoint additional trustees independent
of the Labour party, stop including forewords in future publications, and
introduce an advisory committee consisting of experts and independent advisers
to approve the subjects of its programme of seminars.
But it said: “The trustees do not believe that the charity commission
should have doubts about whether the Smith institute is carrying out its charitable
purpose.”
And it rejected the recommendation to stop using 11 Downing Street,
saying: “We made the point that many other charities apply to use 10
and 11 Downing Street.”
“The trustees consider venues to be largely an operational matter.
Venues are chosen as to maximise our target audiences, and to minimise their
inconvenience.” It was holding many of its events outside London and
using other venues in the capital, but “we would not wish to rule our
the use of Downing Street for our seminars.”
But Stevenson’s letter prompted more questions, with the charity
commission also returning to the use of 11 Downing Street: “It is our
view that when looking at a charity’s activities in the round that it
is reasonable to note that venues connected with a particular party or point
of view are being used. It is in this context that we are examining why 11
Downing Street is the choice for what would appear to be the exploration of
public policy rather than education.”
“As it stands, the charity would appear to be planning to use
this particular venue at least once a month for the next six months, and four
times this month alone… I would welcome the trustees’ comments
as to why they are intending to hold a significant number of events at this
venue.”
Stevenson replied on behalf of the think-tank, saying: “We have
previously explained that we hold some of our seminars at 11 Downing Street
because it attracts a high level of participants and is easily accessible.”
“As it happens, we would observe that since the original programme
was drawn up, our proposed use of 11 Downing Street has decreased to two seminar
series and two one-off seminars this year [2001].”
The commission was only partly satisfied by this reply, emphasising
“the need for the trustees to consider whether using 11 Downing Street
(or similar venue) is at any particular time a reasonable and proper way of
furthering the objects to advance education, or whether the public might be
being misled into thinking that it suggested an affiliation with a political
party or a particular point of view.”
Stevenson provided further answers, but showed little sign of moving
on the issue of 11 Downing Street, saying only: “The trustees will review
the position from time to time.”
In March 2002, the charity commission closed the case, saying: “It
appears to the commission that in light of the way in which the Smith institute
advances education that the trustees will always have to be vigilant in ensuring
that the manner in which they do so is charitable in law.”
“As the Smith institute’s stated charitable object, namely,
‘The advancement of the education of the public in the field of study
and research into the economy of the United Kingdom,” is closely connected
to the political process, the trustees will always have to be vigilant that
they are operating within the [commission’s] guidelines… and do
not stray into influencing public policy or legislation in a manner which
is not in furtherance of the charity’s stated object.”
“On the basis that the trustees have now provided responses which
allay our concerns and that they have now taken steps to appoint additional
trustees and an advisory committee, as well as keeping the venues for the
institute’s activities under review, the commission will be closing
its files on the matter.
“We would however like to stress the trustees’ responsibility
to ensure that the manner in which they advance their stated charitable object
are charitable in law.”
Stevenson was naturally pleased the case was closed and referred, in
a further letter, to the “process” as having been “somewhat
protracted”.
Unfortunately for the Smith institute, the charity commission is about
to start a similar process all over again.
Another version of this article first appeared in The Daily Telegraph.
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