SINCE the market turmoil that followed Chancellor Kwasi Kwarteng's mini-budget last week eyes have been turning to the think tanks influencing the UK Government's controversial economic policies.

One, in particular, is the Institute of Economic Affairs (IEA), which bills itself as "the UK's original free-market think-tank".

Following Kwasi Kwarteng's tax-cutting fiscal update, Conservative Home founder Tim Montgomerie tweeted: "A massive moment for [the Institute of Economic Affairs].

"They’ve been advocating these policies for years. They incubated Truss and Kwarteng during their early years as MPs. Britain is now their laboratory."

But what exactly is the IEA and what is its connection to the Prime Minister and her Chancellor?

What is the IEA?

The IEA is a libertarian think tank that promotes free-market ideology, deregulation and low taxes.

The registered charity was founded in 1955 by businessman Antony Fisher in response to the post-war social democratic consensus of the time.

The IEA is supportive of Liz Truss's economic vision, having promoted such neo-liberal policies for years.

Who funds the IEA?

The think tank has come under fire for its alleged lack of transparency over its donors.

The Guardian has reported that the IEA has taken donations from the fossil fuel industry while OpenDemocracy revealed it also took cash from the tobacco industry.

The IEA's website reads: "The Institute is entirely independent of any political party or group, and is entirely funded by voluntary donations from individuals, companies and foundations who want to support its work."

In 2018, Unearthed reported that the IEA offered to broker access to UK ministers for US donors seeking to influence Brexit

In 2019, the Charity Commission warned the organisation about using its resources to campaign for a hard Brexit. The warning was later withdrawn after the IEA agreed to work with the commission to improve its conduct following “a breach of charity law”.

And in 2021, it lost a two-year court battle with LBC radio host James O'brien who claimed the IEA is a politically motivated lobbying firm funded by "dark money".

O’Brien described the think tank as a “hard-right lobby group for vested interests of big business, fossil fuels, tobacco, junk food”.

The IEA said it was the victim of a smear campaign that is politically motivated. It said any implication taht it is engaged in illegal lobbying on behalf of corporations is false.

Who is IEA director general Mark Littlewood?

The National: Institute for Economic Affairs director general Mark Littlewood welcomed the Chancellor's tax-slashing mini-budgetInstitute for Economic Affairs director general Mark Littlewood welcomed the Chancellor's tax-slashing mini-budget (Image: PA)

Mark Littlewood is the general director of the IEA. He was labelled the 38th most influential person on the British right by broadcaster Iain Dale in 2018.

In the same year, the think tank boss was recorded by The Guardian saying that the IEA is in the "Brexit-influencing game", offering potential US donors access to UK Government ministers and civil servants.

In the same story, Littlewood told the newspaper he had "absolutely no problem with people who have business interests, [the IEA] facilitating those".

What's the IEA's connection to Liz Truss and Kwasi Kwarteng?

After her election as Prime Minister, IEA director general Mark Littlewood told Politico that Liz Truss had spoken at IEA events more than “any other politician over the past 12 years”. 

The site reported that Littlewood sees Truss as someone who is "genuinely engaged in the ideas rather than just occasionally turning up to say a few warm words at a Christmas party".

He said Truss sees the “big picture positions on tax and regulation and monetary policy” with the IEA. 

Truss also hired former IEA member Ruth Porter as her election campaign's co-director.

And in 2012, Kwarteng co-wrote a paper for the Insitute for Economic Affairs on the fiscal rules it argued are needed to control government spending.

The Chancellor was mocked following his mini-budget after a quote from the paper was shared on social media.

It said: “Governments often run a structural deficit to boost the economy with greater spending and lower tax. Unfortunately, this…has a poor track record.”