Why is it so hard to tax the rich? Would it fix our economy? With Gary Stevenson | Crooked Media
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June 11, 2024
Pod Save the UK
Why is it so hard to tax the rich? Would it fix our economy? With Gary Stevenson

In This Episode

The UK’s sorry state of affairs when it comes to water and railways is both a massive problem and an opportunity for the incoming government. Water companies are teetering on the brink of collapse and it feels inevitable that they will soon fall back in to public ownership. But how can we pay for renationalised services? 

Cat Hobbs from We Own It talks to Nish and Coco about the history of privatisation and the opportunities that renationalised services present to the UK. 

Later, economist and activist Gary Stevenson explores how the public can rewrite the narrative on taxation – starting with a 1% tax on people with wealth of over £10,000,000. But why stop there? Coco and Nish ask about other potential boons to the state budget. 

Pod Save the UK is a Reduced Listening production for Crooked Media.


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Cat Hobbs, Director of We Own It

Gary Stevenson, the Activist and Economist behind Gary’s Economics


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Coco Khan The UK’s economy is broken, so how can we fix it?


Nish Kumar Is the solution a wealth tax or is the solution nationalization? What I’m saying is, should we slap a wealth tax on a Dell or should we simply nationalize her?


Coco Khan I’m Coco Khan.


Nish Kumar And I’m Nish Kumar and this is Pod Save the UK. Hello everyone. Welcome to the show. It is election time and so we are coming at you with some extra episodes. And this week we are looking at ways to fix the UK economy. It’s going to be massive issue in the election, and it feels like both of the parties are trying to avoid talking about actually getting into specifics of how they would reshape the economy, and to some extent, seem to be in denial that the economy needs reshaping at all.


Coco Khan Well, don’t worry, because whilst they’re in denial and won’t talk about it, we will. So we’re chatting with Gary Stevenson, the economics YouTube superstar, and Cat Hobbs from We Own It. First up is Cat. Just a quick note. This interview was recorded last week before Labour announced its GB energy policy.


Nish Kumar The privatization of public assets began in the 1980s during the Thatcher years. Water, energy, railways, Royal Mail and we were told that privatization would mean better services, savings for the government and an uplift in investment. But in many cases, privatization has been a disastrous failure. No example is more apparent than the case of our rivers and waterways, often literally full of shit as our overloaded system struggled to cope.


Coco Khan Energy bills have skyrocketed. Water companies are trying to raise bills by as much as 90%. Investment in services only seems to happen after government intervention, and all the while investors skim off money from our essential services. These issues will be of critical importance to voters in the coming election. So joining us now is Cat Hobbs, director of We Own It, a not for profit organization that campaigns against privatization and for public ownership of services. Welcome, Cat.


Cat Hobbs Thank you. Great to be here.


Nish Kumar Is how busy a time is this for you? I mean, in terms of with the election looming, is that something that accelerates your workload?


Cat Hobbs Definitely. We’re super busy because this is an absolutely historic opportunity for if it’s a Labour government, Labour to actually take back our NHS and privatization in our NHS, the institution that they created that has been so successful and popular that this government has undermined so much. And a historic opportunity to start taking water companies back into public ownership, because we’ve got Thames Water absolutely on the brink of collapse. Just holding on at death’s door. You know, probably it will collapse very soon after the election. And so again, we you know, we’re going to have a new government that could be bringing Thames Water into public ownership.


Nish Kumar Can you just run us through. I mean, I sort of attempted a potted history in the introduction that we talked about, but could you just give us a kind of potted history of the kind of privatization of all of these public utilities?


Cat Hobbs Yeah. So privatization was always a very extreme ideology. It’s one that we took on in the UK under Margaret Thatcher. She didn’t get away with it. Everywhere. So in Scotland, for example, water was not privatized. That government sold off, water or energy or busses. And then since then, that ideology has continued. Obviously we had, the railway being privatized in 1947. Then we’ve had this, conservative government privatizing more, you know, privatization on steroids, Royal Mail being sold off, our NHS being opened up for more and more competition and private companies to to get a foothold. 100 billion has gone out, to private companies in the past ten years. And it’s really an ideology that says everything has to be a market. Everything has to be something where consumers can choose. And that’s going to reduce prices and that’s going to provide a better service. And it’s so clear now that the opposite has happened. You know, prices have gone up, cost has gone up, the quality of services has gone down across all these services, and we don’t have any accountability. And in the meantime, you’ve got investors around the world profiting from that dividends flowing out of the country. How is this taking back control? And it’s a it’s an ideology that all politicians have been signed up to, actually. And there’s this huge gulf between where the public is and where the political elite is.


Coco Khan I do just want to focus on the services for a bit. What has gone so wrong there.


Cat Hobbs On water?


Coco Khan On Water.


Cat Hobbs So in 1989, Margaret Thatcher sold off the English and Welsh water companies. They were sold off to private investors, private companies. These water companies all cover a certain area. You don’t have a choice about where your water comes from, so you have to pay your bill to that company. And what’s happened since 1989 is that these private water companies have, increased our bills. They have failed to invest in the infrastructure. And what they’ve done is they’ve they’ve built up a debt mountain. So they started out in 1989 with no debt at all. Zero debt. The government wrote it off. They built up a debt mountain of 60 billion. They did that because they know that we’re going to keep paying our bills.


Coco Khan That’s how that we have to write. We need water. We have.


Cat Hobbs To. We need water. So that’s how this works. That’s why people want to own assets in general. Because, you know, it’s it’s better to own than to rent, right. And so as a country, it would be better if we owned some stuff than if we’re just renting it off investors around the world.


Coco Khan I played monopoly. You get the utilities, you’ve won the game.


Cat Hobbs It’s good fun right? I love it, you know, but it’s it shouldn’t be how we run our essential services.


Coco Khan Well, the most obvious example of, of course, is Thames Water. So when I read some, horrible stats to you, which I’m sure you’re very familiar with, the company is currently 15 point. 6 billion in debt, bearing in mind that it started, of course, with 0 pounds in debt. As you explained in 1989, Chancellor Jeremy Hunt has insisted that the company is on its own. But it’s an it isn’t inevitable that it will have to come back into public ownership.


Cat Hobbs I think so, yes, I think it will because its main, investors, main shareholder, which is a Canadian pension fund, has now said that the company is worth nothing. They’ve done a shareholder write down on the company. So essentially shareholders are exiting. They’ve had what they wanted and now they’re leaving. And they are saying this is this is not worth a while anymore. Why are they doing that? Because there’s been a whole conversation about what is to be done about the debt. And what they’re saying is if we’re going to improve infrastructure, we want to increase bills. And they’ve been talking about massive bill increase. It’s all the water companies have bill increases from anywhere from 24% to 74%. Thames we’re talking about 44% bill increases. So they’re saying, oh, you want to not have sewage in your rivers and seas? Well, you’re going to have to pay for it. What about the 85 billion that they’ve had over the years. Would that’s that’s gone. Where’s that.


Nish Kumar Gone. Where’s that gone? Okay, I don’t want to sound like an idiot. Where’s that gone? We’ve all been paying bills this entire time. So where has. Where has all the money? Where is all the money? Gone? And I’m asking you this. Do you have it? Explained Bill? So just to give me a second to calm down. Go to the Thames Water office and post some dog shit through the letterbox and see if they like it when sewage is delivered into their house. Yeah.


Cat Hobbs So in the case of Thames Water, you’ve got Canadian pension fund, you’ve got Macquarie was obviously a big, big one. That’s sort of the original asset management firm that kind of created that model where you can make these huge profits at the expense of people who have no choice but to, to, to pay for that service. So a lot of it’s gone to Australia. Also Thames, which is owned by Abu Dhabi sovereign wealth fund, Chinese sovereign wealth fund. Some countries have sovereign wealth funds and invest them in other countries assets. We don’t we don’t do that in the UK because we don’t believe in owning anything. But yeah, it’s gone to investors around the world who saw that revenue stream and thought, yeah, we’ll have a piece of that that’s for sale. Well.


Nish Kumar It’s been paid out in dividends.


Cat Hobbs It’s been paid out in dividends to shareholders.


Nish Kumar So it’s just siphoned out. Yeah. In the form of dividends to people who own shares.


Coco Khan And out of the country as well. Most state. Yeah. Yeah, yeah. It’s one thing if you say, oh we go to British billionaires and apparently it might trickle down, but it’s definitely not when it’s going to a different country.


Nish Kumar Yeah, I hate them all, even the British ones. Just to be clear, I hate all billionaires.


Cat Hobbs Yeah, I think I guess, you know, it’s either people on on our doorstep ripping us off or people very far away, which makes it slightly harder to get to them.


Coco Khan Yeah, yeah.


Cat Hobbs Yeah.


Nish Kumar So we’ve got the situation where the all of the water bills that we’ve been paying has been siphoned off in the form of dividends being paid to investors. Yeah. So none of that has gone into infrastructure or maintenance, which means that now the pipes are all incredibly old. I’ve heard comparisons to a sort of Victorian system, and the sewage system is now not fit for purpose. So there’s sewage in the water. There’s a town in Devon, Brixham, that’s had a vomiting bug that’s been found in the water supply. So obviously there’s a huge amount of work that needs to be done to get the system back to water. So some estimates have put the cost over 260 billion pounds. So far. The water companies have pledged 10 billion pounds and the government has pledged 55 billion pounds. I mean, that’s a drop in the Sheffield Ocean. So does renationalisation make sense when the costs are this high?


Cat Hobbs I think it makes more sense because we’ve already been ripped off in this way now for 35 years. We’ve lost that money that’s gone out in dividends. We’ve got this debt mountain to deal with, but if we have public ownership, we won’t keep on handing out these dividends. We will be able to reinvest that money back in and the debt will be cheaper in public ownership.


Coco Khan Critics would say, well, Scottish Water is owned by the Scottish Government. Welsh Water’s a not for profit. They still have big issues. How do you square that circle?


Cat Hobbs Yeah, they they do have issues. I mean Welsh Water is not accountable. It should be brought into proper public ownership. Scottish Water invests 35% more than the English water companies. It has much cleaner rivers and seas and it’s consistently the most trusted utility in the UK. It’s not perfect and public ownership isn’t a panacea to my mind. It’s an essential prerequisite, you know?


Nish Kumar So in terms of actual hard policy, Labour has so far resisted calls to nationalize water. But there has been a big policy announcement around the railways. So in April, Labour promised to nationalize the train network within five years of coming into power with a new public body called Great British Rail. Inheriting private companies contracts as they expire. So these private companies, they get a limited term contract to run the trains, and then that contract is up for renewal. So the premise here is that every time one of those contracts expires, it will come back into public ownership. But like now, it’s still planning to lease rolling stock, meaning the actual trains, the literal trains from private companies. So it’s actually not very different from the conservative strategy on the railways so far. And they’ve allowed a number of franchise agreements to not renew them and return them into public ownership. So how different is Labour’s plan from the existing conservative plan?


Cat Hobbs So I would say the conservative plan, they haven’t really had much of one. I mean, they talked about great British Railways, but they haven’t.


Nish Kumar It was a Boris Johnson thing wasn’t it? I mean, it’s like with a lot of his things, it was it a costed thing, was it a specific policy or was he just sounding the word British in front of things?


Cat Hobbs I think it’s I think it’s nonsense. I mean, the railways, are worse than than they’ve ever been and Great British Railways hasn’t, hasn’t happened. What has happened is rail companies have failed and the government has brought them back into public ownership because there was there was no alternative, really. So it’s happened in a haphazard, chaotic kind of way without reaping the benefits of having a fully publicly owned network.


Nish Kumar Yeah.


Cat Hobbs Labour policy is different in that they are talking about bringing contracts in-house as they expire, franchises in houses that expire on rail. They also are wanting to have busses in public control to give mayors that option. We’ve been campaigning for that and we’ve won victories in Greater Manchester, West Yorkshire and Liverpool as well. And then policy on busses is good. Actually. The dividing line for Labour is if it’s a contract, then they are happy to look at bringing it in-house. That kind of having those sorts of conversations and policies. If it’s an asset that requires buying back, they’re afraid of talking about.


Nish Kumar That, and that is that why the trains are going to remain as rolling stock? That’s right. Right. Okay.


Cat Hobbs That’s right. Which is a shame because they’re the most profitable bit of the network. Yeah. But but there is a there is a kind of logic that I think it’s flawed because actually us owning assets is a good thing that pays for itself. But we need to change that, that conversation.


Coco Khan So you must forgive me for asking. Perhaps the most obvious, but I think that’s probably the most pressing question. Will Labour’s plans mean train tickets will be cheaper?


Nish Kumar I mean, I guess I guess that is the most important question.


Coco Khan That’s what everyone wants to know, right? Will it be cheaper?


Cat Hobbs I hope so, I don’t know. I mean, it should be because, it saves money. Essentially, it saves around 1 billion pounds a year to have a fully publicly owned railway. Because you’re not having all of the crazy fragmentation that we’re having right now. You get efficiency savings from having it run as a network, and that should be passed on in the form of cheap offers and more investment.


Coco Khan It should be passed on. I noticed what you said there Cat.


Cat Hobbs Yeah, exactly. And also all railway has been, you know, really neglected. I mean, our public services in general have been totally underfunded and neglected by this government, you know, for the past, 13 years. The Chomsky quote comes to mind about how you privatize the service, you defund it, you make sure it doesn’t work. And then when people are frustrated and they’re angry and they’re confused and they’re unhappy with the service, then you say, oh, well, the private sector to the rescue, that’s this government’s playbook.


Nish Kumar And do you think that’s what’s been happening with the NHS? Because the Conservative Party constantly trots out the line. Sunak’s done it already so far in the election campaign that more money has gone into the NHS than at any time in the service’s history, which is, technically true. But it’s slightly misleading, because what the conservative government have done since 2010 is cut to the percentage increase. The NHS has received more money every single year since its inception, which it should, because in theory, it keeps more people alive and it but they’ve cut the percentage increase, which is allowed them to say that technically more money is gone in, but in real terms it amounts to a cut to the NHS. Right?


Cat Hobbs That’s exactly right. And so yes, yes.


Nish Kumar I love it when I get stuff right. I love it.


Cat Hobbs That’s exactly right. And and so and so staff haven’t had had a pay rise, you know, commensurate with, with what’s happened in terms of inflation. So that’s why they’re leaving. But yeah. So if you look at other countries and how we compare, we spend around 40 billion a year less than comparable European countries, 73 billion less than Germany, you know, so we have less beds per person and we don’t have the staff because this government isn’t prepared to to pay them properly. So yes, they’re technically spending more, but they’re not keeping pace and it amounts to serious underinvestment. In 2014 we had the best healthcare system in the world, and I think what this government has done to the NHS is absolutely criminal, is absolutely disgraceful, and we should be having all politicians promising to reverse that and actually invest in the NHS. I’m going.


Nish Kumar No ask you the dreaded question about costings here. We’re looking at water, we’re looking at trains. And we’re looking at health care when we look at these huge areas. The problem is basically the same is we need more money. Yeah. This new government, if it is indeed the lib a Labour led government, is going to inherit an absolute shit tip of an in-tray in terms of the public finances. How do we raise the finances to buy back these utilities, whilst also simultaneously doing what I guess people would agree is the most pressing need, which is pumping money into the National Health Service.


Cat Hobbs I think we have to recognize that you don’t get a well-functioning economy without really strong public services. You know, just in terms of the impact on people’s lives. If you can’t take the the train somewhere where you can afford to take the train or the bus, you know, that’s bad for the economy. And we know that every pound invested in the railway brings around 2 pounds, 50 in economic benefits.


Nish Kumar But I totally get that. And I think when we talk about a kind of crisis in British productivity, I don’t think you can take out of the sort of productivity problem, the fact that the infrastructure is crumbling, which people need to work and people need to get to work. And also, you know, long term sickness, which is at least partly related to the various problems in the health care system. But in terms of the money, isn’t it aren’t we sort of dancing around the obvious problem here, which is we need to look the public in the eye and say we need a wealth tax, because that’s where the money is going to come from ultimately in the short term. And we have the largest tax burden on our population in the postwar period. And but that tax burden is largely falling on middle and lower earners. And at the same time, we had a government who, you know, if we take it back to 2010, scrapped the £0.50 rate of tax on the highest earners. We have a government that has done nothing to reform and sort of antiquated capital gains tax system. That means that, you know, Rishi Sunak’s overall percentage of tax paid is actually eye watering in comparison to the actual sums earned because he, you know, capital gains tax is not tiered in the way the income tax it isn’t. Isn’t there an argument that you just have to look the public in the eye and say, the wealthiest people in this country are going to have to pay more because they were able to hoard money during the pandemic. That was not subject to a kind of one off wealth tax. Isn’t that what we’re all dancing around and not saying here?


Cat Hobbs I think that’s right. I think there’s lots of different ways you could implement wealth taxes and tax justice. UK have lots of good ideas on that. I think it’s right. I think that what we’ve seen in the pandemic particularly is astonishing levels of waste and corruption, with money flowing out from the very top, you know, not for the public benefit and just harming our society really in so many ways. So yes, I agree, but I think the argument that we’re trying to make and I think is really important is you have to own assets if you want to be able to, to run efficient public services. And it’s a false economy to say that we can’t afford it. It’s really short term thinking, you know, what’s going to happen for the next 35 years in our water system if we carry on subsidizing wasting money on these investors who’ve done nothing but extract value while pouring sewage into our rivers, the seas, how is that a long term solution? You know, and when you ask the public, so the public wants public ownership for all of these, when you ask them why.


Nish Kumar That’s right but isn’t it all the polling suggests that.


Cat Hobbs All the polling shows that, even even conservative voters want public ownership. And when you ask them why, it’s because they, they want the money that they’re paying, either in their bills or in their taxes to be reinvested back into the services. We have a short time to to influence this, and I think this is something we should be able to move, politicians on, you know, particularly Labour, because as you’ve said, you know, they’ve signed up to insourcing contracts on rail. I’ve talked about the biggest wave of insourcing in a generation that’s signed up to public controlled busses. Why not install the NHS contracts and then why not do as we’ve been talking about and actually invest sufficiently in the NHS?


Coco Khan Cat Hobbs, thank you so much.


Cat Hobbs Thank you. It’s been a pleasure.


Coco Khan [AD]


Coco Khan Now joining us in the studio, we have economist, activist, former trader and YouTube superstar Gary Stevenson. Welcome, Gary.


Gary Stevenson Thanks for having me.


Coco Khan Thank you. Thank you for coming. I thank you for this book, which we are showing in a very natural way. I think we’ll agree.


Nish Kumar For listeners. Coco is behaving a little bit like Laura Linney in The Truman Show, when she tries to seamlessly integrate an advert into the show.


Gary Stevenson I thought it was well worked.


Coco Khan Thank you, thank you, thank you.


Nish Kumar Gary we’ve been, crying out for us to get you on the show for a long time because your YouTube channel, Gary’s Economics, is a great cache. Crash course on Crash Course is actually also relevant.


Coco Khan Yeah, yeah, yeah.


Nish Kumar It’s a great crash and crash course on how trading and the globalized economy works. And it shines a light on the sometimes labyrinthine and complicated world of economics. We recently had our very first ever guest who’d been on Star Wars. We think you might be our first multi-millionaire guest.


Gary Stevenson No way.


Nish Kumar We think so.


Gary Stevenson There’s a lot of multimillionaires, nowadays. You got one nice house in London you’re a multimillionaire.


Nish Kumar But you’ll you’ll one of the. You’re one of the good millionaires, right?


Gary Stevenson I like to think so. You have to ask my mum what she thinks but I try my best.


Nish Kumar Just give us a quick sort of potted summary of your your sort of backstory of what sort of led you to this point.


Gary Stevenson Okay, so I’m from Ilford in east London. I grew up in quite a poor family, you know, a little terrace house next to the railway. I was always very good at maths. Wanted to be rich and working those skyscrapers that were going up in Canary Wharf. There was a kid, you know, worked hard at school, got into grammar school, got expelled from grammar school for selling drugs. Yeah, 3 pounds worth of. I’m not going to make out like I was some sort of.


Coco Khan Yeah. Some kingpin


Nish Kumar Yeah.


Gary Stevenson Kept working hard. I’d manage to get into LSC.


Nish Kumar Yeah.


Gary Stevenson A school for economics. For those that don’t know, very fancy economic school. Everyone that was mad about becoming a trader, and I was studying maths in economics. I just thought, I’ll get good grades, get a job. Turns out that’s not enough. Basically, because the way you get jobs nowadays, you have to apply for 57 internships at 57 investment banks in your second year before you got your grades. So you have to send off all these CV’s and cover letters. And basically I had no chance of of getting in. And I found out that Citibank. Hi. One try to do a card game, which is basically a maths game. And I entered that game. I won that game. I become interest rate trader for Citibank in 2008. The world immediately blows up and suddenly, bizarrely, everyone in my department starts making enormous amount of money. I get involved, I start making a bit of money as well. In 2007, I come to the belief that basically the global economy will collapse forever because of what I believe is a growing problem of wealth inequality. So I start betting the global economy will collapse forever. And then in 2011, I become Citibank’s most profitable trader in the world. And in 2011, I turned 25. So I was still a very young man. And, you know, that that got me thinking. Okay, maybe we should try and stop the global economy from collapsing, which is what I’m doing now.


Coco Khan It’s mad. So. I mean, I went to school in Dagenham.


Gary Stevenson Okay, just down the road.


Coco Khan Down the road. And you know that image there about being in the shadow of Canary Wharf, like. Yeah, definitely. Growing up in East London, that juxtaposition of the massively wealthy and the very, very poor so striking. It’s absolutely everywhere. Yeah. Yeah. And I guess having been on both sides of it, I suppose what I’m getting at is like, you seem the to the heart of darkness. I guess you could say.


Gary Stevenson I mean, I’ve been in there. Yeah. I’ve been, I’ve been right. It’s a weird place to trade in for, especially my job, where basically what you’re what you’re betting on is, is the economy going to be good or is the economy going to be bad? Because obviously some of us, including me, come to the conclusion the economy is going to be bad. And you might, you know, we’re paid millions of pounds a year. You might think if you’re paid millions of pounds a year to work out, the economy’s going to be bad and you think the economy is going to be bad, your job should then be to stop the economy from being bad, but it’s just not. Your job is just to bet on it. It’s just straight out to bet on it. And it’s it’s a strange thing to experience, but the fact is that is how we structured the world.


Nish Kumar So going into this election, you’ve been calling for some pretty sort of substantial reforms and specifically a wealth tax. Yeah. Can you, can you just outline what that wealth tax would look like?


Gary Stevenson So what we campaign from part of a group called Patriotic Millionaires. I didn’t make the name up, but, we campaigned for wealth taxes on wealth of above 10 million pounds. So, you know, we’re not going off to your nan’s house, you know, unless you’re not is worth more than 10 million pounds, which are nice.


Nish Kumar Well, my nan’s a rocket fan. So.


Gary Stevenson Yeah, wealth of about 10 million pounds. We can pay for a 1% tax on wealth above 2 million pounds. So if you’re worth 20 million pounds, campaign 100 grand a year. To be honest, I don’t think that’s a massive ask for people with that level of wealth you’ve got. Consider these guys make 5% a year on their wealth. And the reason I campaign for that is because I’ve made a ton. Money, but in that if you don’t deal with wealth inequality, it will grow really, really quickly. If water quality grows quickly, that means the rich getting richer and ordinary people getting poorer. It’s, you know, the worst doesn’t come from nowhere. What we’ve seen in the last sort of five, six years, this massive collapse of living standards, we’ve seen this massive collapse in the ability of young people to buy property. Massive increase in government debt, massive increase in household debt. At the exact same time as this massive increase in millionaire and billionaire wealth. Listen, if these guys get richer, they get richer by buying the assets that your kids need, the houses that your kids need. And I think if you don’t do anything about it, over time, they will own more and more of the country, more and more of the houses, and we will be forced to go further and further into debt just to live.


Coco Khan I hold my hands up and say that I don’t feel very, learned around the economics. The economics. That’s what I just said So I think. I think I’ve revealed myself there.


Nish Kumar I feel like Justin Timberlake in The Social Network. Drop the. V.


Coco Khan Yeah, yeah.


Nish Kumar It’s cleaner.


Coco Khan And I think sometimes the, the language is intentionally obscure, so the average people can’t understand it and therefore can’t participate in it. In the spirit of that. I wonder, could you please explain to me the logic of Rachel Reeves saying that they wouldn’t apply a wealth tax?


Gary Stevenson Obviously, I tried to up the Labour Party and I try and lobby the Labour Party. You know, I would talk to the conservatives if they would talk to me. So far, nobody’s reached out. That’s not surprising. Some people in the Labour Party and I haven’t spoken to Rachel specifically. They will say to me privately, you know, we think inequality is a big problem, but we think wealth taxes is a is not a vote winner because people hate taxes. Even if you say tax above 10 million pounds, they’re scared that the British public won’t accept it. And, you know, I’m not sure that that is true. And of course, you know, we could speculate whether they’re worried about whether their donors will accept it. You know, I couldn’t say whether it is. But what they tell me, not Rachel, is but other people. The Labour Party is, I think is unpopular.


Coco Khan So there’s no economic reason for it. There’s no like, you know, issue that would occur economically if we had this wealth tax.


Gary Stevenson I mean, some people will make arguments. Of course. The classic argument is if you tax in the leave or it will affect investment. I don’t think these cut the mustard, to be honest. I don’t think it’s I think what we need is the assets. You know, we need these assets. If they leave, we can still tax the assets. If giving rich people a ton of money, little investment, then we’d be invest in our tits off right now and we’re not. So I don’t think that works. You know, the problem is, at the end of the day, I if you’re an economist, you can work as a trade. You get paid 2 million pounds a year if you work in, in talking publicly, somebody needs to funghi. Yeah. So I’ll go on radio stations. And for years I went on radio for free talking about economics. Who am I coming up against someone from the IEA issue, economic affairs.


Nish Kumar And just just contextualize what that is, we talk about it so often.


Gary Stevenson A thinks that is a think tank. There’s a group of think tanks which are sort of near Westminster. It talks about as a tough district, think tanks, they’re funded by billionaires, and they give them sensible names such as, you know, Taxpayers Alliance, Institute for Economic Affairs, billionaires paying money for people like me to go on TV and radio and say, whatever you do, don’t tax the rich because it’s bad for you. So a lot of rich people pay a lot of money to tell you that it’s bad for you and what they want people to hear. When I say tax the rich is we want to tax you. You want to touch you, not want to touch your mum. You know, that’s you know, this is the way it’s become unpopular. And this is this is what I’m trying to say.


Nish Kumar But according to a YouGov poll, 78% of the British electorate support a wealth tax. That’s a YouGov poll conducted in January of this year. We talked to Cat Hobbs, earlier about renationalisation and renationalisation of things like the railways, the water, protecting the National Health Service from encroaching privatization.


Nish Kumar These are all potential vote winners. If you consult any of the polling.


Gary Stevenson I think we are increasingly winning the public argument, I think. I think part of the problem is, is with economics as discipline. I think that there’s been a narrowing of what is considered acceptable and sensible economics. And, you know, in the 60s and 70s, tax rates are much higher on the very rich. Of course, the Beatles famously sang it’s one for you, 19 for me, because they pay 95% income tax. And I’m not saying what a 95% income tax, but we it wasn’t that long ago that we lived in a country and a continent, to be honest, where the rich paid very high rates tax and ordinary people like my dad worked for the post office, could afford a house and and a family. And these things have gone basically. But the window of acceptability has changed. You know, and if you were to say we want to even raise tax on the very, very rich, the 78% people would say, that’s insane. And I think the problem is come in really out of the discipline of of economics. And I think there’s too many economists are very, very narrow minded in the way they see the world, and also that they don’t get punished if they’re wrong, they don’t get. So I was a trader, right. And as a trader, you have to be right or you lose your job. You see what I’m saying? But look at what the last sort of 5 or 6 prime minister done to the country. David Cameron makes £10 million today, a year after leaving office, working in finance. He must be a great financier. Boris Johnson’s going to be make a ton. Rishi Sunaks father is literally a billionaire. So I think the problem you have is that these economists, they’ve really narrowed their idea of what’s acceptable, and things get worse year after year for ordinary people, but for them it gets better. So we’ve kind of handed over the keys of the castle to guys who are robbing it blind, and they’ve got no reason to stop.


Nish Kumar And I would say that I would, I would definitely say if listeners haven’t listened to the episode we did with George Monbiot, who we and I should be clear, falsely accused of being a multimillionaire earlier in the episode. But George talks a lot and has written a whole book about this idea of neoliberalism and the elimination of diversity in economic thought, and with the the sort of teachings espoused by, you know, Hayek and Milton Friedman that were then popularized by Reagan and Thatcher have now become what we think of as economics, and there is no space for any alternative perspectives to be discussed, but also a lot of these privatized industries, again, just to sort of bring it back to the subject of nationalization, a lot of these privatized industries are not being allowed to fail in the way that they should be. If we live in a free market economy, you know, the the train companies collapse, but then they have to be saved by government funding because we need trains. The water companies, Thames Water is constantly on the brink of administration. It may well go into an administration later this year. We need water to come out of our taps so the companies themselves are not actually punished. The shareholders who make money from the dividends from these companies are not being punished. If there is a there’s a kind of there’s a kind of systemic problem with this current incarnation of deregulated, stakeholder driven capitalism.


Gary Stevenson Yeah. I think the problem is once you have very high levels of inequality, the rich are really, really, really rich. And increasingly the poor very impoverished, and the middle class is struggling. These guys have loads of money to lobby for the answers that they want, and they are the only power that ordinary people really have in response is taxation is the only thing you can. It’s the only power you have. You you have votes and you have the power, theoretically to tax the. It’s still the only protection that you have. If you look at most of history, most of history is a small, incredibly rich elite ruling over a vast majority of incredibly impoverished people. And that is the that is the present truth in most of the world. And it was true in this country for most of history. We stopped that for a period of time because we decided, no, we’re going to make the rich pay for this level of taxes, and we’re going to use that money to allow ordinary people to have housing and healthcare and food and education. We only were able to achieve that because of high levels of taxation of the very rich. And then in the 80s, we we lost the argument, we lost the argument. And in doing that, we lost the only weapon that the poor and ordinary have ever had to protect themselves from the rich. And as soon as you take that away, they if you’re Rishi Sunak and you have, according to the Sunday Times, 700 million pound wealth, you’re going to make a passive income of 40 million pounds a year. That’s 1 million pounds a week. Nearly right. How are your kids going to compete with Rishi Sunak’s kids to buy houses when he’s making 1 million pound a week? You know, these guys will end up with all of their assets. That’s the power of compound interest.




Coco Khan So let me ask you, like you know, you said earlier the, you know, the poorer and poorer the middle class, we’ve been struggling. You sort of remind me of how, you know, there was a policy that was floated at one point about like, higher taxation for over 8-K, and that seemed to lie pretty badly. Yeah. And we can talk about how some of those people are deluded about where they are in the social structure. But also, you know, a lot of them are getting squeezed. So, yeah, putting all of that aside, given that, why only 2% is your suggestion into, you know what? Why not 5%? Why not 10%.


Gary Stevenson To be honest? Well, who’s 1%? 1% is our shot. And, you know, I didn’t suggest those numbers. That’s the group that I, one of the groups I’m a member of. I mean, I suggest the 1%. And I mean, I think the reason why we asked that is, well, look, we’re not going to get it. We are not going to get that well, at the moment, you know, 2 or 3 years down the line, this things get worse and worse. You know, people might become more open minded to things which at the moment are not considered acceptable, you know, but at the moment we’re not going to get that. So. We’re trying to get something, you know, and I would. The truth is, these guys make 5% a year. If you were to tax the very rich 5% year on their wealth, all that would do is stop them getting richer. 5% is the level of tax you need to stop the rich slowly eating the middle class. If you allow them to get richer and richer and richer and richer, they will take everything. If you allow a certain group to become infinitely wealthy, then the rest of us will have nothing. You know you have to stop this. So to be honest, realistically, I think if you if you want inequality to increase, you need to look at higher levels of taxation on the very, very rich, the extremely rich, because it’s the only way to stop me from taking everything. Well, I think we need to do is explain to ordinary people. Tax is not about making you poorer. Tax is about making you richer. If you don’t tax the very rich. Who do you think’s going to own your house in 50 years time? It’s not going to be your kids. It’s going to be their kids because they are getting richer and richer and richer. And what that means is taking an increased and increased and increased ownership of the assets which you need.


Coco Khan So tell me about, you know, the Labour Party is saying they’re going to close non-dom loopholes. They’re also talking about ending tax breaks for private schools. Is that going to move the dial at all?


Gary Stevenson It’s not going to be enough. It’s not going to be enough. I mean, listen, we’re sitting here today. Elections are not going to be long. Very, very, very likely. Labour win a majority. I mean, we have a Labour government. They’re going to. Increase very, very limited number of taxes on a very limited number of people. In some ways, it’s targeted on the rich and most people who send their kids to private school. Of course, rich people non-doms overwhelmingly richer people. They’re not going to raise much of that. They’re not going to make as much of that because it’s so specific. It’s so specific and realistic that when you talk about the very rich, their school fees, a drop in the ocean for them, they don’t really care about their school fees. You know, if you’re making £1 million a week, like maybe Rishi Sunak families, how much is an extra 20% in the school fees? It’s not much, is it? It’s movement in the right direction. But it’s, you know, it’s two steps against a very strong current.


Coco Khan I’m just looking for some reason to be hopeful, you know, it’s just some reason to get up tomorrow.


Gary Stevenson I’ll tell you one thing that gives me hope. I don’t think these countries for two decades. I think if we can show them a way out of what we what we have, they don’t want it to be this unequal. They don’t want it to be this unfair. I think the problem is they’re confused. They don’t understand what’s happening. They don’t see the way out. And I think that if we can provide them with the understanding and the route towards a fairer settlement, then I think they will follow us. And I think it’s the job of, you know, people like us to make that clear message and that clear vision. And that’s that’s what gives me hope.


Coco Khan Well, in the spirit of that, let’s do it. Let’s let’s put some sort of understandable policy that our listeners can write to whoever their MPs and say, do this, absolutely do this. What could that be?


Gary Stevenson The first thing is you need to be reducing wealth inequality. And when I say wealth inequality, because I’m not talking about doctors and lawyers or God forbid, God forbid, maybe even bankers, we’re talking about individual families with wealth of 10 million pounds or more. You need to be hitting them. You need to be hitting this.


Coco Khan And how would you do that? Inheritance tax? How would you do that?


Gary Stevenson Well, you know, it’s interesting. You say inheritance tax. Know if you had higher levels of inheritance tax on people with very, very high wealth. This would generate an enormous amount of money for the government. You put a lot of money back. And not only that. It would stop all of the homes being owned by 25 families, and then your kids could buy a house. But, you know, I’ve been thinking for a long time about, am I going to do a video about inheritance tax? It’s so demonized, is so demonized.


Nish Kumar And yet because it’s made out that basically your parents in their sort of three bedroom semi-detached house are going to have it sort of hacked to pieces.


Gary Stevenson Yeah, yeah


Nish Kumar by the government essentially, like it’s .


Gary Stevenson What people don’t realize is the reason your kids can’t buy a house is because this tiny group of it, very wealthy families, own everything. That’s why if you and if you don’t get the wealth away from them, we’ll never get it back to you. Really? We need to. We need to rebrand tax. And you know the debate right now, everyone. You know, Rishi Sunak, Keir Starmer, both acting like that absolutely hate tax. Yeah. You know, I mean and if we don’t successfully rebrand tax, the rich will eat this country alive. It is the only way to stop that from happening. So, you know, this is what this is what keeps you up at night. This is what I rock my brains about every day. How do we stop ordinary people from resisting calls on increased taxation for the super rich?


Coco Khan You know, because Patriotic Millionaires is basically an organization like that meme of fry from Futurama saying, please take my money. You know what I mean?


Gary Stevenson You know. It’s a it’s a good it’s a good organization because, you know, you know, people like Rishi Sunak often say, you know, if you tax them, they’ll leave. Or here’s a bunch of millionaires, myself included.


Coco Khan It’s my money. Please.


Gary Stevenson Like, you know. Rich people very often oppose higher taxation for the richest. If we don’t achieve this, look what’s happening to this country now. Look what’s happening. We are sitting in now. Great Britain 2024 come winter. Half the country cannot simultaneously feed their kids and turn the heat on. And that will get worse. That will get worse. And, you know, go to places like Brazil, India, South Africa. Look at what very unequal societies look like. The rich are living in luxury mansions surrounded by barbed wire. I’m personally, and I’m a wealthy person. I don’t want my kids on either side of that barbed wire, and I don’t. I don’t think it’s even in the interests of the rich, because what is happening now, this rapid increase in inequality is destabilizing society.


Coco Khan Yeah, I guess I just. The reason I mention that is just, you know, you were saying we need to rebrand tax. So instead of it being something that is to be looked down upon, that we all perceive as being a bad thing and negative in our life. It’s good vibes, right? Like that’s what it is. It’s really.


Gary Stevenson You know what the what I think you should do. You have been taxed the same way if you haven’t an army. Seriously, if you don’t have tax, how do you prevent yourself from the rich? You have an army to stop foreign armies from invading. You have tax to stop the rich from eating your kids alive.


Coco Khan It’s like it’s a good thing to have. It’s a nice thing to have is to be proud.


Gary Stevenson Of everything you said. Look at my heart. I’m a mathematician. I’m an economist. I’m a trader. I made millions of pounds. But now society is going to collapse. You know, I don’t do what I do because I want to be Mahatma Gandhi or Mother Theresa. I don’t want your society to collapse. I come from a that’s what I do.


Coco Khan You know what? Society is good isn’t it?


Nish Kumar When you put it like that, it seems evidently reasonable. I mean.


Gary Stevenson I’ve been to Mumbai and I’ve stayed in a luxury hotel. And outside there’s like a, like a family line naked on cardboard box at dying. Yeah. You know, that is what inequality looks like, you know, and I’ve read Charles Dickens, and I think some people lazily assume the kind of poverty that we see in places like Mumbai that we see in places that Johannesburg can’t happen it.


Nish Kumar Yeah.


Gary Stevenson It has happened. It is happening now. If we don’t take action, it will happen again.


Coco Khan I recently came across a piece in the Financial Times. It said that the UK had higher homeless levels than the states. And I think, you know, quite often we use the states as our oh, we’re not as bad as them. We use them as a barometer to make us feel more comfortable about what’s going on. We’re not like America, but we are. We are. The homelessness is poor.


Gary Stevenson And the thing is, you know, the homeless are only the tip of the iceberg. Yeah. For every one person out there on the streets, there’s 20 or 30 that are worried about paying the rent. Yeah. You know, I mean, and I grew up in London, obviously. My, my brother and my sister still live in London. My sister works in the arts. She works really hard. She can’t pay the rent. Yeah. Do you know what I mean? And okay. Some people say she didn’t work in the arts. You know if somebody’s working really hard on two degrees, can’t pay the rent.


Nish Kumar Something’s gone wrong.


Gary Stevenson Yeah. She’s not the. Listen there’ll be people listening that will be in that situation that we know people in that situation.


Coco Khan Absolutely.


Nish Kumar Gary, thank you so much for joining us.


Gary Stevenson Thank you.


Coco Khan So look, I think certainly what we’ve gathered from today is that renationalisation is a way that we can immediately, relatively immediately, improve conditions for people in the UK. I don’t know how you do it without wealth taxes, despite what Labour’s saying, but it feels like the actual center of our problem is just political will. Like that just doesn’t seem to be anyone talking about this.


Nish Kumar Yeah, it absolutely is. And I mean, I think based on a lot of the polling that we’re looking at and that we have available to us, there is a huge amount of support from the British public for nationalization and also for wealth taxes. I think what Gary so brilliantly articulated was the idea that there has been a huge transfer of wealth in this country that was then accelerated during the coronavirus pandemic, and the fact that there has been no recourse to examine what happened to the economy and whether this has been good for the majority of people living this country, it is kind of a disgrace. You know, I think if you go up to anybody in the street and say, do you think that the private water companies are succeeding as you might have to boil your tap water, given it might contain a parasite and the rivers are filled with human shit. And at the same time, while all this is happening, while ordinary people are panicking about what’s coming out of the taps in their house. Is it fair that wealth inequality is spiraled in? The richest people in this country got richer in a half decade. That has been brutal for most of the people living in this country. And I think I feel that the answer that you would come to is people would be in favor of nationalization of some public services, and they would be in favor of wealth tax. And I feel like it’s incumbent on. The Labour Party, particularly to start asking those questions.


Coco Khan I mean, what’s weird about it is that actually we are on the cusp of some nationalization. But that’s because those companies have failed. Yeah. So it’s really bittersweet. As much as I’m excited that we’re actually having these conversations in earnest now, which we’ve needed for such a long time, it’s had to come because everything fell apart. And as you mentioned, the aforementioned shit in the water. I suppose, you know, one positive note is like, well, we’ll take it, you know what I mean?


Nish Kumar Yeah.


Coco Khan Like, even though it should never have gotten to this level of, just unfairness that we all have in these conversations and moving towards something that looks a little bit like renationalisation. I think we should be clear that actually a lot of the proposals aren’t fully that, you know, it is something.


Nish Kumar Well, it’s definitely something to pressure an incoming Labour government. About, if the Tory party get back in, I guess just directly in their own mouths. Cut out the middleman, save yourself some time. Shit directly in your own mouth. And if you see Rishi Sunak, just give him £20, because that’s essentially the country that you’ll be living in. And if the Labour Party is looking for someone to run their comms, I am available.


Coco Khan Well, on that note, thank you for listening to Pod Save the UK.


Nish Kumar Now, if you have any news from your own backyard or any other comments you want to share or topics you want us to look into, email us at PSUK@ReducedListening.Co.Uk. We also really love to hear your voices. So if you’re feeling brave and want to ask us a question, send us a voice note on WhatsApp. Our number is 07494 933444. Internationally, that’s +44 7494 933444. And can I also say I really love the last few weeks? We’ve had so many good questions coming in for our guests directly. We are more than happy for you to do our jobs for us and write more incisive and probing questions than either of us could come up with. We absolutely love it when we can put questions to interesting and important people that you want answered.


Coco Khan Interesting approach you took there because I think if it was me, I would spin that more as like, you know, direct participation rather than laziness. But, you know, I do see how that does work.


Nish Kumar This is what David Cameron meant by the Big Society. Get other people to do your work for you.


Coco Khan Never took you as a Cameron guy. Nish.


Nish Kumar Listen, I love fucking pigs, I love it, I love to stick my dick in a pig.


Coco Khan We’re always looking for news lines on this show, and I think we finally found it. So don’t forget to follow @PodSaveTheUK on Instagram, TikTok and Twitter. You can also find us on YouTube for access to full episodes. And yeah, please do drop us a review if you like what you’ve heard. Despite the immense profanity.


Nish Kumar David Cat, there was a story that David Cameron might have put his dick in a pig. Okay, that’s just to contextualize that for younger or American listeners. Pod Save the UK is a Reduced Listening production for Crooked Media.


Coco Khan Thanks to senior producer James Tindale and digital producer Narda Smilionage.


Nish Kumar Our theme music is by Vasilis Fotopoulos.


Coco Khan Thanks to our engineer Alex Bennett.


Nish Kumar The executive producers are Anoushka Sharma, Dan Jackson and Madeleine Herringer with additional support from Ari Schwartz.


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