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Economist Gary Stevenson joins Tom Swarbrick to breakdown how the UK can solve the wealth inequality. Mr Stevenson also sends a message to Prime Minister-in-waiting Andy Burnham, calling on the former mayor to appoint him as an adviser so he can influence government policy. Listen to the full show on the all-new LBC App: https://app.af.lbc.co.uk/btnc/thenewlbcapp #tomswarbrick #garystevenson #economy #wealth #business #wealthtax #money #LBC LBC is the home of live debate around news and current affairs in the UK. Join in the conversation and listen at https://www.lbc.co.uk/ Sign up to LBC’s weekly newsletter here: https://l-bc.co/signup
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0:00
Why did you want to make the documentary
0:01
Because I want people in the country to know what's going to happen to the economy so they can stop things from getting worse
0:06
I want to reach more people. I don't want the country to go down the plan, basically
0:10
Because your challenge in the documentary is that if we continue with this level
0:14
the pace of wealth inequality, the middle class is going to be screwed
0:20
Yeah, it's getting quicker. It's getting quicker. I started becoming interested in wealth inequality in 2011 when I was a trader
0:27
And back then it was increasing. but since COVID the rate of increase is enormous
0:31
and I want to be clear when wealth inequality is increasing it's not just an abstract thing
0:36
and it's not even just about the rich that is the rich getting richer and everybody else getting poorer
0:40
including the government including the working class including the middle class we're really at a point now
0:45
where the government's finances have been so badly deteriorated I think this has been patched up for a long time
0:50
by government borrowing if I'm honest and we can't do that anymore and now we can't do that
0:55
but basically we have a choice to make because inequality is still increasing that has to be paid by somebody
0:59
When we talk about wealth inequality, we're talking about things that people own
1:04
We're not necessarily talking about income inequality, which is a separate thing. This is housing, stocks and shares, land, businesses
1:12
It's the valuation of those things that is driving that wealth inequality. Ownership of assets
1:17
Most people will acknowledge that this is a problem now. There are lots of different ways
1:23
to find an answer to this potentially. your way is massive wealth tax i mean ideally yeah ideally how would that work so i mean what
1:31
we campaign for is two percent on wealth above 10 million so that's marginal above that so if
1:35
you're worth 11 million you'd pay two percent on one million which is 20 000 pounds a year
1:39
which is not a lot you've got to bear in mind these guys make five percent a year like minimum we spoke to one billionaire on the show um and he doesn't take less than 15 percent a year so no 15
1:48
percent on 11 million pounds is going to be what's that going to be i don't know you're the trader
1:53
One point, it's going to be £1.6 million, basically. You can pay £20,000 a year
1:59
But I'll be totally honest with you, that probably wouldn't be enough, but it would slow it down
2:03
The difficulty with that, obviously, is wealth isn't necessarily crystallised until that asset is sold or the gains are returned
2:12
So who values the cost every year of the value of the house, the art, the car, all that stuff
2:21
So when Jeff Bezos got divorced and his ex-wife, now ex-wife, got given, I don't know, $100 billion or whatever, who valued that
2:29
Well, I guess his lawyers and her lawyers. It gets valued by the people who value assets. Yeah
2:33
So the government would do that? Yeah, you have a department in government, yeah
2:37
But I mean, it's totally possible to do. We do it when rich people get divorced. We can do it when rich people pay the taxes
2:43
I think it's worth bearing in mind how incredibly complicated the system of income taxes is
2:48
And yet we achieve it every year for 60 million people. because we're only going to be doing it for people above £10 million
2:52
No, this is only a few thousand people. You're not doing it to many people. You put yourself forward to be challenged
2:57
in this documentary, which is, I think, really good. I think that's a good thing to happen
3:00
because lots of times you watch stuff and it's kind of a puff piece for an idea
3:04
that never really gets put the other side. So I take my hat off to you in doing that
3:08
because you go to see a very, very wealthy individual who says, no, thanks very much
3:12
And then you go and speak to various tax experts, one of whom Dan Needle, kind of well known to a lot of people now
3:16
who says what you're talking about is populist claptrap. it won't work
3:20
it's not the long term solution to this and there are other solutions available
3:24
It's really frustrating talking to Dan Needle because I'm an inequality economist
3:29
that's my area of expertise I'm very very confident if we don't do anything on this rapid growth in inequality
3:35
we will see an enormous explosion in poverty and not just we will see it
3:39
we are seeing it poverty is increasing incredibly quickly in this country that will continue
3:43
You could do other stuff he says equalise capital gains tax with income tax
3:48
Yes you could do that But let consider a billionaire who making 15 like a Basim Haidar in a documentary He going to be making 15 on a billion pounds 150 million pounds a year passive income Capital gains you pay when you sell So if you are a billionaire the poorest billionaire in the country making just 150 million pounds passive income
4:06
3 million pounds a week. If you had 3 million pounds a week passive income, how often would you sell an asset
4:11
But you're going to be taxed on the payment of that 3 million pounds a week into your bank account, aren't you
4:17
But that's the thing, they don't pay income tax either. That money is generally in trust or it's in corporations, so they don't pay income tax
4:22
So this is the way in which you go about tackling that wealth. don't you're taxing that well the great thing about wealth taxes it taxes people who are wealthy
4:30
and the problem we have is any other tax for example dan needle suggested tax and i want to
4:33
be clear i don't oppose dan needle suggested tax i think it's a good tax change because that taxes
4:38
you on sale it's only going to tax people who sell assets yes and the super rich don't ever sell
4:43
so it's an upper middle class tax but do you mind are you fussed about the method if the end outcome
4:50
is reached that wealth that is accrued in lots of different ways by already wealthy people
4:55
is taxed at a greater rate than it is now. And particularly, we move taxation away from taxing work into taxing wealth
5:02
Do you care that much? I'm actually relatively agnostic about method. I just think we need to be really, really careful that we don't, because obviously you
5:10
need to bear in mind the very rich are, of course, very rich, very powerful. They have a lot of influence in media, in politics
5:16
They will be trying to push loopholes in this to make sure that when the tax comes in, the
5:19
very rich are exempted. And a great example of this is the exact tax which Dan Needle supports
5:23
will not tax the super rich. It will not tax the richest because they don't have to sell
5:28
assets. So I'm agnostic about the way that we do it as long as people who are richer
5:34
are paying more in percentage terms than people who are poorer. Genuine progressivity
5:38
Yes. I don't like giving wealthier people money from poorer people. I think that's a
5:44
very, very bad idea. And there are, I think, lots of examples. Don't look into government debt interest then
5:48
Well, quite. But there are lots of examples of that. And part of the reason that there are methods of solving this without a wealth tax, the way in which government spends money is frankly ludicrous on things like giving a bung to already quite wealthy older people who don't need that extra money out of the taxation of people who are already struggling to put a roof over their head
6:09
Listen, if you want to reduce wasteful government spending or what you consider to be wasteful government spending, I support that
6:13
What about the Trimlock? Listen, I don't want to get involved in a fight which pits poor people against poor people
6:20
But it's not poor people, Gary. Obviously, very wealthy people should be paying their fair share of tax
6:27
But say you're a pensioner and you're not paying your tax. You're not paying what tax maybe you think they should
6:33
And we raise your tax slightly in a situation where the billionaires are paying zero. It's not about tax
6:37
it's about the money that is being repurposed from taxpayers now to older people who
6:43
aren't working obviously because they're retired and whether or not those older people actually
6:47
need that money. The OBR said the pensioners triple lock is going to cost tens
6:51
of billions more, 15 billion more by 2030. Is that worth looking at as a transfer of wealth
6:57
from poorer people to some, not all because some pensioners are very poor
7:01
and need that money, some wealthier people it's got to be looked at. Listen, so I'm out to your
7:05
If you think that's a good idea, I support it. I don't shoot it down. I think one thing that's very important here is we don't get involved in this situation
7:11
I'll tell you this right now. I'm an inequality expert. If you don't deal with that top 1% inequality, I guarantee you an explosion of desperate poverty
7:18
And I think what's interesting, say somebody like Dan Needle, he has his own tax suggestions
7:23
Good tax suggestions. I support them, right? And you've got your own tax policy changes
7:27
I'm not an expert on the triple lock, but they sound good and I suspect it's a good idea. Thanks
7:31
I wish that people like Dan Needle would stop shooting in the head
7:36
people like he's not an expert on inequality or economics I'm an expert on inequality and economics
7:41
if you don't do anything about top 1% inequality I guarantee you living standard collapse
7:46
there's doing something that is different to what you're suggesting and then there's doing nothing
7:52
and if you not wedded to a particular method then you want the outcome and the outcome is people are taxed on their assets in a way in which they currently the outcome is we stop seeing the collapse in wealth ownership of the middle class and the working class and that can come through well in part building more homes too
8:09
when you consider the rate of growth so when i first started my youtube channel six years ago
8:13
i did a video on the maybe you remember i called in lbc and spoke to you about the massive growth
8:18
in government debt and i said the government's going to give out 350 billion pounds and i couldn't
8:22
find a way to describe how big that number was and i settled on it's more than three times the
8:27
wealth of the world's richest man six years ago 350 billion pounds is more than three times the
8:33
wealth of the world's richest man and just two weeks ago we had a man go through one trillion dollars these guys are growing their wealth at 40 50 percent a year tom in economies that are
8:41
growing one or two percent if we're lucky if you do not stop that mathematically i guarantee you in
8:47
10 20 years they own everything which means ordinary british families own nothing do you
8:50
want to stop that i i you want to stop their ability to be that wealthy or do you just want
8:56
to tax them more on the wealth that they're gaining so you you end up having more i want to
9:00
stop their ability to grow that wealth quickly listen if you've got cancer if you've got cancer
9:05
you need to stop that cancer from growing it's as simple making money is the speed no if they are
9:10
growing their wealth at 50 in economies that are going one percent then everyone else in that
9:15
economy has to lose an enormous amount of wealth every year it's as simple it's not an infinite
9:18
at some game here, Tom. But there's no one specific pot of finite wealth
9:26
How fast is the economy growing, Tom? Oh, if at all. Exactly. Listen, listen
9:32
There is an infinite pot. Sorry. There is a finite pot. We're 1% growth a year
9:36
Listen, of course, I want the magic growth. Just like Keir Starmer
9:39
I want the magic growth to come down. But you need wealthy people to continue to be wealthy in order for the wealth tax
9:43
to generate anything for poorer people. I'm not trying to generate income. This is not about
9:48
generating income this is about protecting the ability of ordinary british men and women to own
9:52
wealth to own their own home to not be poor do you think there is something wrong with making money
9:57
no no and i i hopefully you've read my book by now you should have done it's not it's not about
10:03
demonizing the rich you know i'm a pretty rich person i've made quite a lot of money and i think
10:07
if you've got an opportunity to make money go for it fill your boots you know a lot of these people
10:11
are rich because they do good for society you know not all of them um but it is just about having a
10:17
systemic understanding. Listen, take a step back, right? I know we're talking now 2026
10:22
in the UK, and the last 78 years have been good for working people in this country, all
10:26
right? Look around the world, look at history before World War II. Most countries, including
10:30
this country, lived in extreme poverty. My grandma was born 100 years ago in this city
10:35
London, the richest city, the richest country in the world, at the back end of the Industrial
10:39
Revolution, the biggest ever increase in economic growth and wealth in the history of humanity
10:43
and three of her siblings die of tuberculosis, a preventable disease of poverty
10:47
What this shows you is, if you do not take care of your distribution
10:51
it doesn't matter what you do with the rest of the economy, you will see poverty, desperate poverty
10:55
And we will go back there. Listen, just one simple message. I'm not against growth
11:00
You do need to manage the distribution. And it is going incredibly quickly towards extreme inequality
11:06
When was the last time you spoke to Andy Burnham? I've never spoken to him personally. Where have these stories come from that you're advising me on
11:11
You know, I think it is, if I'm totally honest. So, listen, I don't just do my YouTube in this documentary for fun
11:19
I am trying to change policy. So I've been trying to lobby Labour, I mean, for years, obviously
11:24
I never thought we had a chance under Conservatives. But, you know, as long as we've seen Labour coming in
11:28
we've been talking to them. Under Keir, they never wanted to listen
11:33
But, you know, it's been pretty obvious for sort of maybe more than a year now. Keir's on his way out. We've started to have people listening a little bit more
11:39
And I reach out to Labour MPs. I email them. And just, we had a date in the diary for months for me to go into Parliament and meet maybe
11:47
four or five Labour MPs, just make my case. And it happened to be, end up being the day you kissed, I'm a resigned
11:52
Oh, right. So I was in, I was in, when the train coming down. So I was in Parliament the day you kissed I a resigned And I guess I got seen by the press So would you want to advise Andy Burnham on wealth tax Of course I want to influence policy
12:06
Because one of the people who is advising him, a guy called Jim O'Neill, who I'm sure you know
12:10
ex-Goldman Sachs, formerly in the Treasury, founder of the sort of the BRICS idea
12:16
has said that the wealth tax doesn't work. It doesn't raise money, enough money, quick enough, capital flight, all those things he worries about
12:22
Do you then worry that Andy Burnham is going to be given the wrong advice? Oh, 100%. 100%. Listen, you know like I know, I'm a betting man. And what I expect at this point is for Burnham to come in, not do anything serious on top-end wealth taxation. The rapid increase in inequality continues. The middle class continues to lose wealth. Government continues to lose wealth. And it will just be star number 2.0, which is you come in with all these promises, but you have no way to pay for them. And you're seeing..
12:50
The thing is, the people who we currently can tax, the middle class, are getting poorer every year
12:55
And the people who we currently can't tax, the super rich, are getting richer every year. If you don't change that, government will basically have to shut down
13:01
Do you think that, because I agree with you, the way in which work is taxed is absolutely screwing a lot of people who don't earn huge sums of money
13:11
So would part of your advice to Andy Burnham be stop taxing work so heavily, particularly for that cohort of people
13:18
Well, you can probably see the... I don't know if we're officially just radio, but I'm wearing a T-shirt saying tax wealth, not work
13:24
Yeah, you know, you look, the top marginal tax rate, you know, for people with university degrees
13:29
I think it's 71.5%. Yeah, it's mental. It's mental. You know, and then we have, you know, billionaires
13:33
complaining, I'm trying to get them to pay 2%. I think it's crazy people say, oh, Gary's ideas are going to stop innovation
13:38
Listen, if you had the business idea now that you knew was going to make you 50 million quid
13:42
and you thought, but there's a chance that this YouTuber is going to get her taxing
13:47
so that when you're worth 50 million quid, you'd have to pay 2% a year? Would you be like
13:51
actually, I'm not going to do that business. Of course you wouldn't. But what we have is a situation
13:55
where if you go to university, you're going to be 100 grand in debt
13:59
You're going to be paying 72% tax rate. That's much more disincentivising
14:03
So, I mean, I want to make it clear because I'm not trying to raise tax
14:07
I'm trying to cut tax on working people. And the truth is, I guarantee you
14:11
I absolutely guarantee you, this government and every Western government is going to do one of three things in big size
14:16
Either significant taxation rises on the extremely rich, what I'm campaigning for
14:21
significant taxation rises on working people, or further dismantling of the welfare state
14:26
Because inequality is increasing, and that has to be paid for by somebody. And we can't borrow anymore
14:31
So when I say tax wealth not work, I want the public to recognise I'm not trying to raise taxes on working people
14:36
And if you do not raise taxes on the very rich, I guarantee you Burnham will have to raise taxes on working people
14:42
Either that, or further dismantling the welfare state. because the inequality is increasing
14:46
and that wealth has to come from somewhere. There was a report yesterday by the Treasury Committee
14:50
that suggested that student loans had been missold to students. Yeah. Would you agree
14:55
I mean, it's shocking the interest rate these guys are paying on them. So I paid £1,000 a year when I was there
15:02
Yeah, I didn't even have to take a student loan. I think I was the last year of £3,000. Okay, so you're younger than me
15:06
Glad to hear that. Yeah. The grey hair get to the hospital
15:09
I mean, it's, it's, I mean, a lot of, you know, I've got a friend who I studied at high school with and he went and studied fashion design at Central St Martins, got a great grade
15:20
Central St Martins, for those who don't know, is like the most prestigious fashion university in the country, maybe the world
15:25
You know, went and got a great job at Burberry and this kind of stuff. And he's, he can't buy a house
15:30
You know, he was living on his mum's sofa for ages. You know what I mean? We have a situation now where, you know, my dad, I mention this a lot, you know, worked 35 years for the post office, making 20 grand a year
15:38
bought a house got a pension got a retirement sent three kids to university now my sister's
15:43
got two degrees and she can't pay the rent you know so i think and of course that's not to say
15:47
that people without university degrees are not struggling because they're 100% are but yeah i do
15:52
think young people who did everything right worked hard went to good universities got their head down
15:57
got degrees and now can't afford to have families yeah of course they've been given a bum deal
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