Exclusive: IFS wrong on FFA deficit, says leading tax adviser
Richard Murphy accuses IFS of ignoring ‘Innovative Finance mechanisms’ in SNP manifesto
A report by the Institute for Fiscal Studies (IFS) which predicted SNP plans for full fiscal economy for Scotland would widen the country’s fiscal gap has been criticised by tax researcher and chartered accountant Richard Murphy.
Writing for Holyrood, Murphy accused the report’s author of “poverty aspiration” by assuming removal of a funding deficit should be the highest priority of a government.
“Only an economist specialising in tax could think that there are politicians in Scotland who aspire to secure full fiscal autonomy for the country with the sole aim of becoming a nation of paranoid bookkeepers,” he writes.
Murphy accuses the author and other critics of the policy of ignoring a section of the SNP manifesto which refers to innovative finance mechanisms. “It is my belief that they are referring to green infrastructure quantitative easing,” he says, indicating the SNP could use potential post-election bargaining power to push for the printing of new money to pay for investments.
If the SNP pursued an agenda of green investment quantitative easing, Murphy argues, “the rest of the UK will be in their debt if they do, but only metaphorically, because the miracle of quantitative easing is that at the end of the day there is no debt at all.”
Murphy also argues Scotland’s potential for growth has been undersold. “Right now Scotland feels like a company where a management buy out is overdue to release the latent energy and talent within its economy that is simply screaming for the opportunity to put its economic ideas into practice,” he says.
Richard Murphy is an adviser to the Tax Justice Network and the TUC on taxation and economic issues, as well as a number of political parties. He is also the director of Tax Research LLP, and spoke at the annual Convention of Scottish Local Authorities (COSLA) conference in March. He has been outspoken on the ability of economists to be politically objective.
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