The man behind Corbynomics: an accountant from leafy Norfolk
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Version 0 of 1. Richard Murphy is a chartered accountant and tax expert from a rural market town in Norfolk. He is also the brains behind Corbynomics, the radical policy platform that has electrified Labour’s leadership campaign – and he is happy for you to know it. Last Sunday, Murphy, who has forged a reputation over more than a decade as a pugnacious and effective campaigner against tax evasion, took to a podium to harangue a rapt street crowd in the centre of Cambridge about the iniquities of the country’s financial system. Related: How Jeremy Corbyn went from the no-hope candidate to the brink of victory Minutes later, the bespectacled 57-year-old was being cheered by 1,200 people inside nearby St Mary’s church with his radical plans to seize back power from the company boardroom and the Bank of England. “How is it that the UK’s top bosses are paid 183 times more than the average worker in this country? This is because right now we let those bosses do what they like with our public companies,” he argued. “For 30 or more years we have been told about Tina – that There Is No Alternative [to mainstream economics] … You came tonight for a rally. Well, actually I want to tell you that you came for a funeral. Tina is dead. Tonight, I tell you there is an alternative.” Murphy went down well, even though he was only the warmup act for Corbyn. But who exactly is this tub-thumping number cruncher? He is a self-employed accountant who lives with his GP wife and two teenage children in leafy Downham Market, Norfolk. Straight out of middle England, Murphy largely works at home, enjoys a pint (preferably of Suffolk-brewed St Peter’s Ale) and a morning amble round the fields with his cocker spaniel, Hector. But the former Southampton University economics graduate is also something of a polymath. He has written a series of books, held a variety of academic titles and was a founder director of a company that once held the European licence for the game Trivial Pursuit. It’s safe to say his reasonably busy portfolio life has been turned upside down in recent weeks since his ideas formed a key part of the Corbyn economic programme and he was asked to address a launch meeting before what became a remarkable surge in grassroots Labour party support for Corbyn himself. And there could be much more to come. It seems likely that Murphy will become a full-time adviser to Corbyn and some even speculate he could be a future chancellor, an idea even he is keen to dismiss. Murphy said : “It will be up to Jeremy if he is elected leader to decide what if any role he would like me to play. And I would only give my response after discussions with my wife and family. Any job would clearly involve enormous change for my work life.” But while it is true the KPMG-trained accountant, raised in Ipswich by a civil engineer, has spent much of his life poring over balance sheets, he has also been an entrepreneur and public campaigner. An enthusiastic user of Twitter and other social media, Murphy is known for expressing his strong opinions without fear or favour. The media, trade unions and NGOs have responded by beating a path to his door wanting comment particularly on the highly politicised debate about corporate tax dodging. In the conservative and stuffy world of accountancy, there are not many who want to break the omerta. But Murphy was one of the co-founders of the Tax Justice Network, the campaigning organisation that has been at the forefront of the battle to bring the iniquities of tax havens into the spotlight. He has recently reinvented himself more as an economist, writing The Courageous State, a polemical book about the role of governments and markets, which even included, as he modestly points out himself, a draft budget speech for a future chancellor. Another book, The Joy of Tax, will follow shortly. “He has for a while wanted to have a broader canvas,” says one fellow campaigner. A relentless self-promoter, Murphy clearly enjoys the limelight, but social justice runs through him like a stick of rock – which some put down to his Quaker roots. As Corbyn prepares for the Labour leadership, the policymaking establishment are increasingly asking themselves what exactly Corbynomics is,and whether it makes sense. At the heart of Murphy’s project to reinvent Labour economic policy is what he calls “people’s QE”, a policy of using money created by the Bank of England to invest in public infrastructure projects, at the same time as boosting employment and economic growth. Murphy regards it as a natural extension of the £375bn quantitative easing programme already undertaken by the Bank, starting in 2009, to unblock the credit markets in the depths of recession, almost all of which was spent on buying government bonds, known as gilts. But opponents of the idea, including Corbyn’s leadership rival Yvette Cooper, claim that it would undermine the independence of the Bank and unleash inflation and financial market turbulence. Bank independence, a policy drawn up by Cooper’s husband, Ed Balls, while Labour was in opposition in the 1990s, was conceived partly in order to convince wary financial markets that the party could be trusted with managing the economy and would not interfere with monetary policy – cutting interest rates to stoke a pre-election boom, for example. However, the Treasury retains the power to set the inflation target and Murphy insists that Bank independence “has always been a charade” and was introduced to “appease the bond markets”. If international investors took fright, driving up the cost of serving the UK’s £1.5trn in government debt, he would simply order Threadneedle Street to start creating money and buying up gilts. “We could sit out the bond markets for as long as we wished. We would simply restart QE.” That relaxed approach sends shivers down the spine of many mainstream economists. Tony Yates, a professor of economics at Birmingham University and a former Bank insider, says: “Once they’ve crossed the Rubicon of doing it, what would be to stop the political clamour for using QE to pay for something else? You can’t then just buy bonds, because that would just confirm the markets’ worst fears. That’s how Germany got into difficulties, and that’s how Zimbabwe ended up funding all of its expenditure through printing money.” Murphy plays down the centrality of people’s QE, however, stressing that it is “part of an armoury,” which could be used to fund small-scale, “granular” projects, such as insulating homes and bringing broadband to new parts of the country, creating jobs in the process. He insists there would be no sterling crisis if Corbyn were swept to power in 2020: another deep-seated dread of Labour politicians who fear the wrath of the City. “The sterling crisis would pass very quickly, because everything reverts to the mean, and the mean would be ‘what are the fundamental trading levels for sterling?’” says Murphy. He insists the pound’s status as a safe haven for investors would soon trump any market panic about handing over the purse strings to the Corbynistas. Questions have also been raised about the £120bn “tax gap” highlighted in Corbyn’s economic manifesto, based on Murphy’s estimates of the amount of tax that goes uncollected by HM Revenue and Customs. Murphy concedes that perhaps £20bn of that might be recoverable by 2020, after significant new investment in HMRC, which he believes could be made to work much better. “The benefits would be not just for tax collectors, but the level playing field that would provide for legitimate businesses.” But long before Corbyn gets the power to unleash the tax inspectors, Labour will have to win back the public’s confidence in its ability to manage the economy, which was comprehensively shattered by the financial crisis of 2008 and the deep recession that followed. Even if he does not get a call from a triumphant Corbyn, Murphy says he will happily carry on with the more low-profile tax blogging, the university work and the dog walking. It’s not hard to feel he would prefer the call – and the limelight. |