Richard Murphy, author of Corbynomics and, more pertinently for our purposes, author of The Joy of Tax, steps out of a tax conference to go to a cafe to be interviewed. Murphy is now the key thinker of the opposition to Her Majesty’s Government, or, to put it another way, a threat to national security and your family’s wellbeing.
This charge is even more hilarious attached to Murphy than it is to Jeremy Corbyn – corduroy-ey even when he’s not in corduroy, he looks far more like the accountant he started out as than the renegade tax-hunter he became.
He is married and lives in Norfolk with his wife, who is a GP, and their two sons of 13 and 14.
Not all of Murphy’s ideas have made it on to Corbyn’s economic platform; but at the same time, there was nothing on that platform – at least as it was first delivered in the middle of July, at the Royal College of Nursing in Cavendish Square – that didn’t come from him.
The central planks are to close the tax gap (the money Murphy identifies is lost through tax avoidance and evasion by high-net-worth individuals and corporations), and claw back some of the £93bn currently spent on “corporate welfare”; set up a National Investment bank to invest in infrastructure, such as housing, transport, rural broadband and green energy; and bankroll that investment with “people’s QE”, money created for a social purpose rather than for banks.
“I was asked to go to that event about 36 hours before it happened,” Murphy tells me. “They said: ‘Would you like to come along and say a few words?’ Then they sent me the document, which they were going to issue, and I read it and thought, ‘I recognise quite a bit of this.’” (This is Murphy-understatement: “I’m the author of Corbynomics,” he says later.) “They obviously liked my ideas and used them, but they didn’t ask for my permission. As somebody who has written three-and-a-half million words on tax in the past nine years …” I emit some moue of surprise, and he breaks it down for me. “Something like 12,000 blogposts, that’s 3.7 blogs a day, 365 days a year, for nine years … that’s sad, isn’t it?” It’s sad that you’ve worked it out. “I’m an accountant, for God’s sake! One has to have one’s performance matrix.”
Murphy was named by International Tax Review as the seventh most important person in tax in 2013, and in this area with a curious void where its academics should be, he is, by a mile, the major thinker. (“I did a quick Google search,” he says, “and discovered that I could get 500 courses in accountancy, and none in tax. Why is something that is so important so little researched and only taught as an adjunct to accountancy? Why aren’t we researching the sociology of tax, the philosophy?”)
If he’s now bigger than tax, his diary has yet to catch up, and at today’s event – a thinktankish day for tax wonks – his wonky colleagues and adversaries seemed faintly shy around him. Maybe I’m reading too much into it, but they seemed not to want to be familiar, in case it looked like sycophancy, but not to want to be unfamiliar, in case it looked like disapproval, and then, caught in the headlights of friendliness, unable to remember how friendly they had been last time. All except Margaret Hodge, who was rather chilly (she supported Liz Kendall). I don’t think Murphy really noticed (though he noticed Hodge. “Normally she gives me a hug,” he says – but not as if he minds).
Anyway, here we are, in a Turkish cafe – he hasn’t been to a Starbucks in years – and he’s describing what those joys of tax actually are. His phone never stops ringing, and he can never not take it, in case it’s Corbyn.
It’s always Radio 5 Live.
“Tax is, anyway, the second most interesting word ending in x in the English language,” he tells me, in case I hadn’t got the fact that it sounds a bit like “sex” from the title of the book. This is what it does to a person, when they spend more than a decade trying to persuade the world that tax is actually a fun thing to talk about. The book ends on a mock budget speech, detailing everything he thinks needs to change, from national insurance to inheritance tax, as if he were delivering it from the dispatch box. He did a wordcount on George Osborne’s emergency budget of the season before, for verisimilitude. He is such an accountant.
Murphy is famous for having been the first person to calculate the tax gap, the difference between what the Treasury is owed and what it actually gets. His estimate in 2014 was £122bn. HM Revenue and Customs (HMRC), still referred to by Murphy as the “Inland Revenue”, its hand forced by Murphy’s research, came back with the much lower figure of £34bn).
“I still find it crazy. How is it that there are only two estimates of the tax gap, mine and the Inland Revenue’s? Nobody else has come into this major arena and done some work. I’d love it if they did.” All that interest came out of ideas developed while he was practising as an accountant. “In my 20s, I was trained by what is now KPMG. I learned how to do offshore, this was in the 80s, and to be blunt, I didn’t like what I saw. When I had my own company, our story was: you can sleep at night if we’ve done your accounts. It was commercially very successful.” He left in 2000 to write and campaign full-time, setting up the Tax Justice Network.
Country-by-country reporting – the idea that transnational corporations should be asked for a better breakdown of accounts, so that you can tell when profit is drained out of one country and paid tax on in another – was something he dreamt up in 2003, thinking only three people were interested. It’s now been adopted as a standard aim, if not yet realised, internationally – “It’s the first time I know,” he says, “that anybody in civil society has delivered a tax standard.”
And this opens up the space for him to suggest a wealth tax, in his imaginary budget. “It was inconceivable in the past. But as a result of the work that the Tax Justice Network has done opening up the world’s secrecy jurisdictions, now if people move their assets offshore, we can find them again.”
He has other specific proposals – a tax to replace national insurance, which was designed around jobs that don’t exist any more, and “we would need to explore new taxes for the 21st century, which are largely untried. A progressive consumption tax, so people with very few transactions would have very low tax. We have to discourage conspicuous consumption, which is eating up our planet.”
What I think will cause the most ripples, though, isn’t so much any one idea as a new way of talking about tax: no longer a necessary evil, rather a way to take some control over the country’s destiny. “The joy of tax is simply the ability of tax to create the type of society we want, which I don’t think anything else can. We don’t live in a world which is perfect. I think that tax can be the mechanism that we use to deliver a better life for most people in the UK. If that isn’t something that we should be celebrating, I don’t know what is.”
If I thought the semantic similarities between tax and sex were overplayed, I definitely never imagined him to bring up religion. “I’ve become a Quaker during those years [since he gave up his career in accountancy], which was quite important to me when I was looking for four words to replace Adam Smith’s maxims: and I came up with peace, equality, truth and simplicity as being the basis for a good tax system.
Peace being the reconciliation of social conflict; equality is quite clearly redistribution, let’s not beat about the bush. Trust …” he starts, and is almost immediately diverted onto how the law around the limited company is so weak that it’s basically licensed identity fraud. And simplicity surprises me, since he usually argues that the tax system can’t be simplified, that if you want it to be fair, you have to allow it to be complicated.
“Simplicity is recognising that there are certain fundamental relationships in life. The tax system has to stand right back and say, ‘What is it that we are, at a very big level, trying to achieve? What is important in life?’ One of my simple ideas is that we have a duty, one generation, to provide capital for the next generation. Our pension system is well and truly bust, because what we invest in at the moment is shares, and we’ve neglected to build housing.
The younger generations will have to continue to work, day in, day out, busting a gut, and they won’t have anything to look after us with. This big intergenerational contract we’ve missed, so that we leave the next generation with something they can use. We’ve got to have the tax system that encourages this fundamental building of real worth. It’s so simple. If you went back 300 years, people would understand this.”
The endorsement from Corbyn isn’t Murphy’s first brush with politics. “Vince Cable nicked some of my ideas in 2009 and put them in to the Liberal Democrats’ manifesto, which meant they got into the coalition agreement, which meant the general anti-abuse law [part of the Revenue’s tax avoidance strategy] in 2013 came from me,” Murphy says. But it’s surely the first time anyone has lifted the whole lot, to make it the spine of their radical new offer.
I was there for Corbyn’s economic policy announcement, at the Royal College of Nursing, and there was a certain amount of trepidation in the room. We were asking, inwardly, all the questions about Corbyn that we’re asking now – has he strategised this at all, or does he think strategies are a capitalist conspiracy?
Has he got more than “George Osborne is a bad person and so are most corporations”?
How responsive is he going to be?
Is he really going to change the landscape?
The economist Ann Pettifor was disappointed to hear him giving out the growth mantra, and said he shouldn’t be talking about growth, he should be talking about employment, since that was the only meaningful element of growth. I was a bit dispirited that he seemed to be saying they would clear the national debt by closing the tax gap, rather than challenging the idea that the debt was a problem in the first place, which plenty of perfectly reasonable, even centrist economists now do.
Yet the main thing people level at Corbynomics – that it relies wholly on tax, and is therefore nothing more than a throwback to the 70s language of squeezing the rich till their pips squeak – doesn’t stand up to even the most cursory act of reading. A much more important element is people’s quantitative easing, which is based on the idea, put simply: it’s time to give up on financial assets; it’s time to invest in stuff. The government would print money – for social housing, for rural broadband, for green infrastructure – and invest it.
The first immediate accusation was that he was threatening the Bank of England’s independence: it is fine for a government to initiate QE without threatening that autonomy, but not to determine the purpose of that money. “I’m deeply frustrated, I’ve been engaging with some of this country’s best economists. Am I threatening the Bank of England’s independence at the moment? Yesterday I was told, ‘I don’t have to justify Bank of England independence to you, it’s an a priori assumption.’ So what you’re telling me is that you think you’re right. I don’t agree with your a priori assumption, I want you to give me an evidence base.”
The second charge from his critics, mainly in the media, was that printing money causes inflation. “I say to them, have you bothered to work out how the world really works? Have you actually looked at how quantitative easing really worked? Have you understood? Central bankers have currently pumped in $6.5tn, and the net result is 0% inflation. So how am I, with a very modest amount of new council housing, broadband in rural areas, going to manage to do what the rest of the world doesn’t know? Central bankers around the world want to know how to create inflation. I haven’t found this magic solution.”
Even very mainstream commentators are coming round to this idea – Anthony Hilton in the London Evening Standard came out in favour of it as good, commonsense Keynesianism, this week.
But I don’t get the impression Murphy cares very much about the mainstream. He is a moral man who is perhaps not going through his most modest life phase – “I’m well aware that there is one Treasury minister who is now referring to me as the Right Honourable Lord Murphy.” But you write three-and-a-half million words, and finally people start listening to you. Who could pull off modesty at a time like this?
