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Richard Murphy

15 Nov, 13 tweets, 3 min read

Rarely has the UK faced an existential crisis like the one it does at this moment. The relationships between its member nations are uncertain. We face meltdown with the EU, even if we get a deal. And the special relationship with the US is anything but that. This is unprecedented

What has now happened in this mess? The architects of it, secure in the knowledge that the damage they sought to create has been delivered and their consulting futures are secure, have walked out of government. Is that by chance? No. It’s deliberate distraction.

The Brexiteers aim has always been apparent. It has been to maximise the chance of disruption. That’s because they believe financial capitalism works best in such conditions. And they are right. Moments of chaos are times when hedge funds have greatest chance of making money.

But this is a very particular form of capitalism. It has nothing to do with business, or the creation of wealth. It is not about added value. It is simply about using financial power to exploit uncertainty to extract value from others during conditions of chaos.

This type of capitalism is parasitic. It’s aim is to redistribute wealth from many to a few, which few hope to accumulate so greatly that their position is secure thereafter. It is wholly exploitative. It is wholly destructive.

Like the slave owner and feudal landlord, those undertaking this type of capitalism hope that amassed wealth will insulate them from the consequences of their actions. Those consequences, they are quite sure, are for ‘the people’ of whom they are not a part.

Brexit delivers this chaos. The critical decisions on Brexit are to be made this week. And the Brexiteers created chaos just before that was going to happen. Was that chance? I put the probability at less than 1%. This was planned, down to the exit cardboard box.

What was the aim? To disable decision making at this crucial moment by creating confusion for Johnson, I suggest. Feeling rudderless, their hope is he will simply fall back on the mantras he has tried so hard to ingrain in the country that he might believe and act on them now.

What are those mantras? That we must leave, of course. For those who have already left - taking with them the knowledge of the chaos to come that they can now sell - this is their route to riches, having served their time in power. No book deals for them, suspect.

And for the rest of us? The certain knowledge that we have been played and exploited, with the certainty to come that the country will be laid to waste as the consequences of this very rapidly become apparent.

I have the horrible, sickening, feeling, that nothing can be done to prevent the damage that we are to suffer. Only an application to extend the transition period would provide a glimmer of hope of that possibility now. There is no certainty it would even be agreed.

So we now lie, literally awaiting a disaster so easy to foretell. And if anyone thinks the Brexiteers lost this weekend, think again. They have got everything they wanted. It will be many years before the prosperity that should have been ours will be restored.

Right now this might look like an existential crisis. But it is so much more than that.

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More from @RichardJMurphy

Richard Murphy

@RichardJMurphy

5 Nov

The government is going to do £450bn of quantitative easing (QE) this year. That should more than cover its total borrowing fir the year, meaning the actual sum owed to third parties will fall, and so will real national debt as well as a result. 1/-

Saying this, I know that much of the new money created by the Bank of England to fund QE ends up back on central bank reserve accounts held by U.K. High Street banks and building societies with the Bank of England. And that interest is paid on their balances 2/-

The interest paid in those balances is 0.1%. That rate is controlled by the Bank of England, and will not be changing for a long time to come. In effect then the government is paying banks and building societies 0.1% to make them hold new money that cancels the national debt 3/-

Read 9 tweets

Richard Murphy

@RichardJMurphy

29 Oct

In the summer of 2015 Jeremy Corbyn used a pile of my ideas to help him become Labour leader. By spring 2016 his team were telling me they were sitting out Brexit as it was just a Tory fight. 1/

At that moment I knew this was a man who played politics, and not political leadership, and I walked away from any association. I did not regret it. Whatever he said, or was said for him, he was always posturing 2/

Politics is about tough decisions. About finding the way to real answers. There is a lot Labour is still getting very wrong, on Covid, the economy, electoral reform and more. But Corbyn was never the answer on any of those issues either 3/

Read 6 tweets

Richard Murphy

@RichardJMurphy

24 Sep

The government is thought likely to offer a replacement for furlough today that will make employers pay a significant part of the cost of keeping employees on when there is no work for them. This will not solve unemployment. It will encourage it.

Let me offer a simple example. Assume an employer has 10 employees, all on £2,000 a month. The employer has enough work for five people. They could sack 5 people and save £10,000 a month. Or Sunak offers a scheme where all ten are kept.

Under this scheme the company pays for the work the employees do, i.e. £10,000. Then it pays 1/3 of the wages for the time they’re not working i.e, £3,333. The government then pays 1/3 of their wages when not working i.e. £3,333. And the employees lose £3,333 in wages in total.

Read 7 tweets

Richard Murphy

@RichardJMurphy

13 Sep

We have to face the possibility that our government is planning economic destruction for its own political ends – which are the demise of the state as we know it taxresearch.org.uk/Blog/2020/09/1… Does the government actually want mass unemployment and is setting out to achieve it?

Before our government chose to become a pariah state, and before it was clear it planned to fail on Covid testing I expected UK unemployment to exceed five million next year. But now it may be very much worse. And I beginning to fear that is exactly what the government wants.

We find it very hard to comprehend a government that chooses to create unemployment. But remember Thatcher did just that. She created unemployment to destroy unions and manufacturing so she could create a different type of society. Is Cummings now planning something similar?

Read 20 tweets

Richard Murphy

@RichardJMurphy

4 Sep

Rishi Sunak’s gov’t backed loan schemes mean that more than 1.2 million U.K. businesses - which may be more than 80% of all businesses - are laden with debt and tax bills they have to start repaying next year. That’s when they begin to fail and the recession gets very much worse.

Piling debt burdens on companies to get them through a crisis is one thing. To then think they’ll invest in new employment, products or sustainability when struggling to repay that debt is another. They can’t and won’t. Sunak has built a debt time bomb that will drive recession.

The Office for Budget Responsibility has suggested £33bn of the £53bn of government backed loans to businesses may not be repaid. The gov’t says it expects banks to take failing companies to court to recover the money. They’re literally planning to drive the UK out of business.

Read 9 tweets

Richard Murphy

@RichardJMurphy

26 Aug

It’s GERS day again in Scotland. That’s the day when we go through the annual fiasco of Unionist gloating about accounting that literally does not add up that delivers economic data that makes no attempt to record the reality of what happens in Scotland. Let me explain why....

First, let’s remember that GERS was intended to be divisive from the moment it was named, which name was not, I am sure, chosen by chance.

And let’s also remember that GERS was originally a Tory 1990s creation designed to suggest that Scotland could never be financially viable. It was never intended to actually show a true picture of Scottish financial affairs.

Read 9 tweets

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