Nope, it ain’t Zoe

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),

No, The vast majority is the little £10 and £20 fiddles of the grey economy. There’s almost no tax evasion at the top of the economy, there’s an awful lot own at the bottom. And no one at all is going to like the sort of rules and monitoring that would be necessary to collect that evaded tax.

and claw back some of the £93bn currently spent on “corporate welfare”;

Not even the Murphmonster’s idea. That particular piece of idiocy comes from Farnsworth.

(“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?”)

That’s been done. The conclusion being that it’s a cost, a sad amount that has to be handed over to pay for the government we want.

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.

Murph’s tax gap is not what the Treasury is owed. It’s what the Treasury would be owed if Murphy had set the tax laws. It includes, for example, avoidance, which is money the Treasury says is not owed but Murph says is.

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.

Nope, pre-dates that by a number of years. They even had a conference on it before Murphy “thought it up”.

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.”

I’ll comment on this elsewhere, tomorrow.

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.”

That it’s a requirement of being in the EU is a reasonable evidence base. That making the BoE independent dropped the interest premium on sterling another….

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.”

Oh well done. Quote the global number then compare it to your own leetle one in just one economy. And QE has produced inflation: it’s stopped deflation. And printing M0 to spend into the real economy is rather different from fiddling around with financial asset swaps. As absolutely everyone who knows even the first thing about monetary economics has been saying.

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.”

You heard it here first folks…..

69 thoughts on “Nope, it ain’t Zoe”

  1. ““I’m well aware that there is one treasury minister who is now referring to me as the Right Honourable Lord Murphy.” Even treasury ministers can be ironic.

  2. Very noticeable that leftie hagiographic pieces all comment on his arrogance. This is going to get very Greek tragedy. Hubris meet Nemesis.

  3. Murphy is famous for having been the first person to calculate the tax gap

    Murph made this claim on TV last weekend, and Andrew Neil pointed out that HMRC had calculated a tax gap in 2004. Murph’s response was, effectively, that Murph was the first person to calculate Murph’s tax gap.

  4. 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.

    Murphy of all people is complaining about this?!! Chutzpah doesn’t even come close.

  5. And this opens up the space for him to suggest a wealth tax, in his imaginary budget. “It was inconceivable in the past.

    Yes, because we Brits have looked to places where wealth taxes are imposed and sensibly concluded that they are stupid.

  6. @TimN,

    Look at where wealth taxes work, e.g. CH – they have a rather high tax-free allowance are expressed in promille not percent… I don’t think Ritchie would be cool with a wealth tax that kicks in at say £50k, it’s NET wealth so debt is deducted, and is then only 0.25%…

  7. Let’s work it through with the figures given.

    Retiree, owns a house in the South outright, say £350k. £50k in cash/shares outside of tax-privileged pension plans.

    Gives a wealth tax of £875 p.a.

    Which, given the way the UK retirement system works, could actually be a really rather large imposition.

    ISTR Ritchie doesn’t like the idea of pension savings being tax-free, so it could get more fun if that were added in… And then you could have some fun by calculating nominal values of public sector defined benefit schemes…

  8. You should have put a warning before reading about insane and painful this article would be to read. I would have appreciated the prior warning. What an awful way to start the day!

  9. ‘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.”’

    His arrogance and complacency know no bounds! And, as KRL notes, he has a deaf ear for irony. He’s one of nature’s arseholes. Yet, because he says what they want to hear, lefties tolerate his risible egotism. But for how much longer?

  10. Difficult to see how Ritchie would want anything other than a peerage. He makes £65k from grants, c.£15k from his academic role plus more from lobbying for unions and NGO’s – perhaps £100-120k in total. As an adviser to Corbyn & McDonnell he would be lucky to get half that, as opposition political parties don’t have big budgets for advisers. Plus he’d need to live in London so his expenses would be much higher. If he gets a peerage he’d get generous expenses which might make it viable.

  11. “I’ve become a Quaker during those years [since he gave up his career in accountancy], which was quite important to me

    That’s very interesting. Could you give us some insight into the reasons you chose this religion? Its high moral standards?

  12. Not only did the Tax Gap predate him, Gus O’Donnell referred to it as part of creating HMRC. There were even specific targets to reduce some of it agreed between the Treasury and HMRC!
    And it was Richard Brooks who got the figures out of HMRC.

  13. Anyone asked him to defend the Quaker religion from accusations that it’s utter nonsense. Would be good to tease him into defending utter moronic ideas about reality.

    Seriously we should do it and humiliate his intellectual capacity through it.

  14. Watch out! As a Quaker, he might claim it is the Holy Spirit which is moving him to speak. It will be tough to decide which is more nonsensical, what he says, or the reason for saying it.

  15. We are actually quite lucky to have RM as a political opponent. Because he is such a wonderful amalgam of low self interested greed, intellectual stupidity and massive ego, he is incapable of weaving his tissue of economic lies into a coherent (for the 21st century media world) economic policy. If he weren’t so stupid, or egotistical, or greedy, he could be very dangerous. As it is he’s just building himself a bigger and bigger funeral pyre. As I said, we’re lucky. A cleverer person could run with this nonsense all the way to Downing Street.

  16. “The Joy of Tax author thinks we should clobber tax avoiders and pump money into social housing rather than the banks. Does this wonkish former accountant have the masterplan to reshape the country?”
    QE goes into the financial system, not, as implied here, to the banks themselves. And his masterplan would reshape the country, but not in a good way.

  17. Zoe Williams says of Murphy, “He is a moral man…”. Of course, that’s ‘moral’ in the very limited, leftist sense of we-know-how-to-spend-your-money-better-than-you-do. What is moral about hypocrisy, egotism, lies and censoring criticism?

  18. We all know Our Murph believes his own propaganda, but really, do Groan journalists have to start lapping it up as well? Even Zoe Williams, whose profundity of economic thought is well-known in these parts.

  19. I must admit I choked on my coffee at this:

    ‘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’

    That said I can understand how someone as self-evidently stupid as Williams could have a spellchecker mistake ‘moral’ for ‘monstrous’ – the entire piece I am hoping is satirical but it’s time people woke up to the threat this man poses to every person in the UK.

  20. Rob H:
    No, that would be a distraction from his ‘economics’. And it might boost his credibility in some quarters. Besides, the quakers don’t have a belief system that is easily challenged. Many, if not most of them, are agnostic about the existence of God, and they focus on the ‘social gospel’. In the silence of a meeting, quakers reflect and contemplate. I suspect Murphy uses the time to commune with his own ego.

  21. Andrew K

    The Guardian wheel this guy out all the time – and whilst I agree he is analogous to Owen Jones in terms of rank stupidity, he is much more sinister, in that given his communist sympathies. he has effectively colluded in mass murder – a genuinely nasty piece of work.

    It could well be term for Messrs Philby, Burgess, Maclean, Blunt and Cairncross to lend their support to Murphy on TRUK methinks….. (Just giving you a heads up, Lawrence)

  22. My initial thoughts on reading the piece were that it was a piss take. However is Zoe intelligent enough to take the piss? So in the end I don’t know how to take this article. In either case, the Murph emerges as a buffoon of Mr Blobby proportions.

  23. According to Ms Williams Murphy’s children have suddeny become boys. So how much of the article can one trust? Not the bit about him dreaming up country-by-country reporting which was part of UK GAAP before IFRS was invented. Either he has forgotten UK GAAP or he never learned it properly or he has no regard for the truth.

  24. As mentioned up thread Murph is a gift that will, inevitably, explode leaving a dreadful mess around the associated ideas.

    But I’m going to predict that it won’t matter.

    For the left the job is to get ideas out there, into the public consciousness. Murph’s job is to do that. If he falls over spectacularly he’ll be discarded. The ideas of ‘tax gap’, ‘national investment bank’ will continue.

    They are too valuable to the authoritarians to abandon.

  25. diogenes

    Absolutely agree – and without recourse to his ludicrous ‘comments policy’ the various articles ridiculing his beliefs in the popular press seem to see him reduced to the role of saloon bar bore – on a separate point it seems there may be a prospect that the epic fisking of him which is so long overdue might be about to occur shortly after the release of the ‘Joy of Tax’ – can’t divulge the details yet as unlike Murphy the ‘fiskers’ are not in the ‘charitable’ sector so it is time dependent (and for anyone who has not read the Courageous State yet there are simply too many howlers for it to be a quick or simple exercise – I don’t know how big ‘The Joy of Tax’ is but given Murphy has proven unable to grasp even the simplest concepts around taxation like disincentives I can imagine there will be even more to debunk) nevertheless if it can be pulled off he will stand even more discredited a figure than he currently is.

  26. From the sales blub on “The Joy of Tax”

    “For [Murphy], tax is fundamentally about ideas, not technicalities,”

    Yeah, those pesky technicalities.

    I have ideas about powering huge jets carrying hundreds of people across the Atlantic using only a small dollop of cream cheese as fuel. I refuse to be bogged down by the technicalities surrounding my idea.

  27. Diogenes:
    I read the article as saying: ‘this guy Murphy is a bit of a prat, but he’s on our side, readers’.

  28. “He is a moral man”

    No, he’s a Quaker and a socialist.

    Just goes to show the Guardian can say nice things about Christians if it suits their agenda.

  29. “Just goes to show the Guardian can say nice things about Christians if it suits their agenda.”

    Well, when your only firm standard is “what’s expedient right now”, such double-standards are inevitable.

  30. It should be recalled that the Labour Government of the 70s had a manifesto pledge to introduce a Wealth tax. In his memoirs, Denis Healey, a much more intelligent man than Murph, said that he wasted 4 years trying to devise a tax that would yield more than a negligible sum of revenue. Over to superMurph.

  31. Theo:
    “Zoe Williams says of Murphy, “He is a moral man…”. Of course, that’s ‘moral’ in the very limited, leftist sense of we-know-how-to-spend-your-money-better-than-you-do. What is moral about hypocrisy, egotism, lies and censoring criticism?”

    Bingo: I can never understand how the left got the moral high ground on this one (or perhaps why the right ceded it). Is the statist left inherently more moral than the individualistic right? Course not, but somehow all the left are “good” and all the right “evil”.

    You’d have though the evidence of the 20th Century genocides of Mao, Stalin, and Godwin would have buried the case for left wing morality, but no…

  32. And that bullshit about 500 courses in accountancy and none in law…. Is the man so stupid that he does not know that tax is no more than a technical subsection of law? If you want to learn about tax then you take a professional course in tax. There are many firms that offer tax courses. It is simply not an academic subject in its own right.

    Soon he will be moaning that there are as yet no university courses in bricklaying. Maybe this government is stupid enough to rectify the situation.

  33. diogenes:

    Out of interest, any idea how many people who study accountancy at university go on to become accountants? How many accountants didn’t do accountancy at uni?

    My own anecdata from my time at a Big 4 is that all of the trainee accountants studied other subjects at university. Accountancy qualifications were obtained on the job through private study.

  34. GD

    My experience is much the same as yours. Out of 100 people on my PE1 course, only about 5 had degrees in accounting and one of those did not manage to qualify in the end. In industry, I mixed with more CIMAs and ACCAs and not many of them had degrees in accounting or even degrees at all. Some of them had done Business Studies though, which often involves some basic accounting.

    In the Netherlands, every qualified accountant had a degree in accounting, however.

    In my earlier comment I should have said that tax theory is a subsection of microeconomics, so Murph just looks even more stupid. Maybe there are economists who just work on tax but it is part of a wider whole rather than a subject in its own right.

  35. @Diogenes

    If someone really wanted to study tax, they would join HMRC. A 4 year course for their technical inspectors, when I did it there was a day a week at college and 10 hours a week study time in the office. You were effectively a paid part-time student.

    And you end up knowing an awful lot more about tax than the average accountant.

  36. In his memoirs, Denis Healey, a much more intelligent man than Murph, said that he wasted 4 years trying to devise a tax that would yield more than a negligible sum of revenue. Over to superMurph.

    This is especially the case when a wealth tax would be set at just above the value at which a professional, Guardian-reading couple (teachers, for example) would be paying it. Ditto for the maximum wage.

  37. @Glendorran

    No, indeed. There have been times when his obvious lack of grasp of fundamental tax points has been jaw dropping. I remember him being clearly bemused at the idea of inter-spouse transfer of assets for CGT planning purposes. He’d obviously never used it in practice.

  38. In Scotland, at least to be chartered, you have to have an accounting degree, different to England.

    One reason I am an English CA, having done law at Uni.

  39. If you look closely at the picture of Murph at the head of the article, the wall he is standing in front of is suffering from subsidence. Is that a coded way of implying he is bonkers?

  40. On the “PQE won’t be inflationary” claim, I notice that in a recent comment on his blog Murphy has pointed out that tax is required because spending that isn’t recovered in tax is always inflationary.

    I haven’t pointed this out on his blog, as he’s probably a bit fed up with me at the moment for suggesting that profit is income less expenses, that taxable income is a form of profit, and that taxable income isn’t just some arbitrary construct of tax law.

  41. “Is that a coded way of implying he is bonkers?”

    More likely, it’s a coded way of saying that PQE is needed to repair the nation’s walls, because…wibble…

  42. @pelinor
    That’s interesting as he was claiming that no country taxes on profit just a week or so ago.
    That morphed into he meant accounting profit and then he refused to accept there could be more than one definition of profit. I did point out some issues with that only to be told I didn’t understand accounting, my reply with some specific examples around inventory valuation and international consolidation was met with the silence, personally I find commenting on his site a waste of time.
    It’s interesting that he goes on about country reporting when he clearly has little knowledge or experience of international companies and the accounting complexities, I would guess that he actually has little if any real industry experience.

  43. Interesting point on how much he makes as he tries to dress this up as a principled crusade that he does because it’s right, it’s not just about the money (and ego stoking).
    May well be an interesting thread for an interviewer to challenge him on as he’d likely explode.

  44. BniC

    Other than his own ego being massaged by stool pigeons and other hangers on I don’t think he has much experience of anything at all. Real world matters don’t impinge on his ignorance however. As stuck-record and other on this thread have mentioned – it’s about bringing outlandish ideas into the mainstream.

  45. For the record, I’m CIMA qualified, no degree at all, 20+ years in SME and the last eight working at a University. What I know about tax would not take long to explain, but even I know capital allowances better than the dick who came up with £93bn of corporate subsidy.

  46. @Frances
    I can only imagine that the interview with Zoe started well, nice funky coffee shop and cuddly-looking middle-aged gent and all that. By the end she was probably aghast at his arrogance, claims to originality, overblown holier-than-thou attitude and felt that she probably needed to prick his bubble a bit. Me, I would probably have smacked him.

  47. Some quotes from the Murph:

    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.

    Really…did you do accounts for large multinational corporations or just a few actors and session musicians? Surely he isn’t bragging here…

    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

    That will be exciting. I wonder if you can get a DVD or BluRay of him intoning it…

    “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.”

    Performance matrix? What an arse!

  48. or maybe Zoe misheard one and what one actually said was that one has to have one’s performance metrics. I don’t know about anyone else but I prefer to while away my leisure completely disregarding performance metrics or matrices.

    Would anyone bet with me that Murph’s instinct, when he sees an open tin of baked beans, is to start counting them?

  49. Anyone bet with me that Murph’s instinct, when he sees an open tin of baked beans, is to start counting them?

    See, I wouldn’t hold that against him if he did. I work with people like that (I may even have those tendencies myself) and they are bloody good at the jobs they are paid to do.

    If they started trying to run the country like Ritchie wants to do, then I’d start to get worried.

  50. “Anyway, here we are, in a Turkish cafe – he hasn’t been to a Starbucks in years”

    Obviously Starbucks are the Devil’s very own tax avoiders, but I’m not sure that Turkish cafe owners (or Greek, or English) are unduly troubled by The Tax Gap.

  51. Frances et al:

    “…even Zoe sticks the knife in.”

    Well, yes. Even if you agree with Murphy, you must soon realise that his (fragile) ego is all (for him).

    No sane individual could allow himself to be quoted in a national newspaper saying of himself:
    “I’m well aware that there is one treasury minister who is now referring to me as the Right Honourable Lord Murphy.”

    Even Zoe Williams – who has as much talent as a turd rolled in glitter – could not hold back a dig at our 20% of a Professor.

  52. My own anecdata from my time at a Big 4 is that all of the trainee accountants studied other subjects at university.

    My experience (almost 30 years ago, Canadian ‘Big 8’) was that somewhere between half and two-thirds of the intake had commerce or business admin undergrad degrees, and of those, about half were in accounting; the non-business types were from every background imaginable. I think our firm (C&L) were a bit unusual out of the Big 8 – the other major firms tended (at least from what I saw) to be more interested in academic accounting or business degrees.

  53. “Murphy wants to bring broadband to rural areas”
    Hold on a second, doesn’t the Right Honorable Knobend live in a ‘rural area’? Let me guess, the People’s Fibre Broadband will be making its first appearance in Downham Market?

  54. I have a CIMA designation myself and once did ACCA to finalist level before dropping out, no degree, plenty of experience (financial,statutory and management) in multi-company/currency/GAAP and complex areas (aerospace, capital equipment for semiconductors, mining as some examples) and have worked outside UK. Mainly work in IT these days doing business and financial analysis and have even been an IT manager at one point. So it was amusing to have Murphy tell me I don’t understand accounting. As for economics I did A Level many years ago and even with that dim knowledge I know he’s taking rubbish.
    Once interviewed someone with an accounting degree for a position and their lack of basic accounting skills was shocking.
    Interesting comment if we have doe your accounts you can sleep at night…. That should be true for any competent licensed practicing accounts firm, so is he saying there’s lots of dodgy accountants out there.

  55. @ GlenDorran
    I’d start to get worried *before* I started to run the country like Murphy wants to do. I get worried (not just start to) when I *want* to run other people.

  56. “Let me guess, the People’s Fibre Broadband will be making its first appearance in Downham Market?”

    Rather like how East Grinstead became a railway terminus, all lines to points further away from London having been closed on the orders of Dr Beeching, who strangely enough lived in East Grinstead…….

  57. Maybe it’s just me but I have this feeling that at some point further down the line Murphy is going to hit some massive brick wall.

    Either he will be embarassed publicly (like a real car crash interview) or there will be some tax avoidance scam from his past that gets uncovered.

    Unfortunately he’ll probably crawl safely back into the woodwork and be receiving some gilded state pension thanks to his lefty chums.

  58. Rather like how East Grinstead became a railway terminus, all lines to points further away from London having been closed on the orders of Dr Beeching, who strangely enough lived in East Grinstead…….

    Er, no. Only the line from Three Bridges to Tunbridge Wells closed under the Beeching plans, the London line was retained as it was the only one being used to any extent. Beeching gets all sorts of unfair and erroneous accusations hurled at him, likening him to Murphy is a new one though.

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