The Rest Is Politics: Leading - 204. Will a Wealth Tax Actually Fix Britain? (Dan Neidle)

Episode Date: August 30, 2026

Why does tax expert Dan Neidle take Gabriel Zucman seriously as a thinker on inequality, but dismiss Gary Stevenson's warnings as populism? What did he uncover in Peter Mandelson's emails, and how did he expose Nadhim Zahawi's tax affairs? Can a wealth tax really raise the money Britain needs, or is it a seductive slogan that promises far more than it can deliver? Alastair Campbell and Rory Stewart are joined by tax expert Dan Neidle to answer all these questions and more. __________ Search IG.com to find out more and/or Look for IG in your app store. __________ Instagram: @restispolitics Twitter: @restispolitics Email: [e-mail] __________ Social Producer: Celine Charles Video Editor: Caroline Kaye Assistant Producer: Daisy Alston-Horne Senior Producer: Nicole Maslen General Manager: Tom Whiter Learn more about your ad choices. Visit podcastchoices.com/adchoices

Thanks for listening to The Restis Politics. Sign up to The Restis Politics Plus. To enjoy ad-free listening, receive a weekly newsletter, join our members chat room and gain early access to live show tickets. Just go to therestispolities.com. That's the restispolitics.com. And there's, Mad Aggressive Doesn't work. And this was Mad Aggressive Doesn't work.

That's the main reason for my anger, and I will confess to anger about it. He's bought the right to be taken seriously in a way that I'm sorry, Gavin Stevenson has not. One of my pet hates in politics is people importing American controversies here. Mrs Thatcher was one of the most consequential figures of our lifetime, I think, is largely responsible for this and will be proud to be responsible for this. Or is it just a way of bashing billionaires? Billioners won't leave because a billionaires are barely here.

Give us a chance for political imagination. But to have someone who is pure imagination and no rationality is to have a populist. We've got to make a moral case for taxation. This episode is presented by IG. It's August. Parliament's in recess. Fund managers are on the beach or doing whatever fund managers. do. But those of us who follow the news closely know the world doesn't stop shifting just because

it's summer. As Alistar often reminds me when I emerge from our summer retreat, geopolitics, central bank decisions, the markets, and goodness knows what else is going on all the time. And while August may definitely catch investors off guard, having their portfolios spread across multiple apps and accounts makes it even harder to stay on top of things. And that's where IG comes in. IG brings all your investing, trading and funding together in one connected app. So you can move money, manage positions and act on opportunities without even switching platforms. Plus, IG charges no annual fees and zero commission on stocks, shares and ETFs. In essence, it's a more efficient platform that also costs you less. Download the IG

app and get started. IG, trade, invest, progress. Capital at risk, other fees may apply. Welcome to the rest of Pollitt's leading with me, Alice Campbell. And with me, Rory Stewart. And Today we have with us Dan Needle. And Dan is somebody who began life as a lawyer, tax lawyer, became head of tax at Clifford Chance, but really came international prominence when on leaving his law firm, he decided to, and maybe he can explain a little bit more about this, but essentially set up a non-profit, a charity, which began looking at tax affairs and came to real prominence, not just providing commentary on the way tax went, but looking at public figures, looking at the child.

Adam Zahawi, looking at the Prime Minister's wife, looking at the Ambassador of Washington. But he's also become very interesting because although he's somebody who I would say is probably from the left, he also asks very, very tough questions about how one would raise revenue in Britain, how one funds a country like Britain, how one keeps the economy going. So he's a voice who's both idealistic but also a counterbalance, I think, to some of the other conversations we've had around how to make things work. So, Dan, thank you very much for joining us. Thank you for inviting me. Can we start with the Chancellor, Nadim Zaharwe,

because that must have been pretty extraordinary for you. You've been a tax lawyer for 20-odd years. As Rory says, you set up this organisation essentially to help people understand tax. A micro-think tank. Yeah, that's a very, very good way to put it. And then suddenly you're at the centre of quite a big political storm where you've revealed something about the Chancellor's tax affairs, and onto your desk comes a lawyer's letter saying,

we're taking you to call. And remind us what was it that you found out about the Chancellor? And this was, Adam Zahavi was the Chancellor under... Towards the End of Johnson. Yes, thank you for having me out there. It was because Sunak told Johnson he should go. And so Sunak was sack, stroke, resigned. And Zahari became Chancellor for a fairly brief time.

Tell us the story then of what you found out about him. I didn't start out expecting to write about politicians at all. I didn't want to become a journalist. Being a lawyer's unpopular enough. Being a journalist, too, is just too much. The idea was nerdy articles about public policy, which would be read by 200 people, but they're the right 200 people, and maybe help journalists and get stuff into public consciousness that I want to be. That that was the idea. And then it was Jeremy Hunt that started it.

There were these rumours and journalists were asking about these reports that Hunt had avoided tax when he made a lot of money selling his education business. Amazingly successful entrepreneur, which no one talks about. And I looked at this. And from the publicly available information, it was pretty damn clear. He'd done nothing. He must have paid the tax in full. There was no structuring, no offshore, nothing fancy. You effectively found Jeremy Hunt to be innocent, as far as you could see.

There was just no wrongdoing at all. It just looked completely normal to me. And how easy is it to go and examine and investigate that stuff? It really depends. So, for example, let's say that you have personally failed to pay tax and a whole bunch of income. And HMRC have you bank your rights. You're going through some complicated investigation.

You may end up in prison. There is nothing I can find out about that unless you tell me. HMRC are banned by law from saying anything and individual HMRC officers would go to jail if they leaked it, so they never leak. There's no public information. I'd never be able to do that. But if you have a company, I can look at its accounts.

Best of all, if you have a company which got listed, which is what happened to UK have, when a company lists, most private companies... This is the highway's companies. It's a highway's companies. Most private companies, small ones, start up, complete mess legally. Actually, that's a good idea. When people starting a company ask me who they should go to for tax and legal advice,

I normally say, no, don't go to anyone. just blunder along, do what makes sense of a business point of view. If it succeeds, patch it up afterwards. If you get lawyers involved now, you'll never do anything. If and when it lists, the patching up happens. And you get lawyers and accountants crawl all over it, producing hundreds of pages of documents, which is a gold mine. And that's what I had with Sir Harwich.

So with Sir Harwich, I had some company's house records, which was kind of good. But with Sir Harvey, there was just so much. So Hunt, you find no evidence wrongdoing. And then how do you come across the highway? Well, I think Sunak was there as well, actually. I may have the timing wrong. There was a Channel 4 piece on Sunak when he was a hedge fund manager, which was an outrageous hit job on Sudak

and it had clearly been carefully lawyers, so they never said this man's a scumbag tax avoider, but they were giving that impression and it was all nonsense from start to finish and I wrote that up. So paradoxically the first two times, you're actually being relatively generous towards these politicians and saying they're not involved

I was being mean, but the facts were on their side. So you might be somebody who's actually politically from the left, but you were quite happy to say with these two Tories there's no evidence of wrongdoing and to go against journalists on that and then you found this Nadim Sahawi's situation. Yeah, I mean, it's a slight diversion,

but I really resent the idea that because someone has political views, they are then unable to form an objective views about anything else. It's ridiculous. And everyone has political views, and being a member of a political party is just a stamp on your political views.

It doesn't transform them into an irrational, rabid partisanship, or at least it shouldn't. A few. Oh, no, yeah, it does for plenty of people, but it shouldn't. Yeah, it shouldn't. Definitely, it shouldn't.

Yeah, it really shouldn't. I'm with you, Dan. I'm with you. So when Zahawi is basically up to all sorts of stuff. So Zahari, this is just this extraordinary thing that he, when he founded Yuga, which, sorry, another aside, I'm going to keep getting stranded by a site and you'll have to keep me back on the road. To have a leading politician who's founded a company worth a billion dollars. And it's an amazing thing.

Unprecedented business background for a senior British politician. Just a shame he was bent. And he was. So it was an enormously successful. successful company worth an enormous amount of money. Eventually, yes. At the start, it was a nothing. And it was a polling company that specialised in online polls.

Is that what made it distinctive initially? I didn't have specialised is fair. I think created, I think it created the modern online polling panel polling. But when you set up a company, you take founder shares, and you pay nothing for them because it's your company. And the shares are worthless, but if it becomes successful, they will become valuable. And his partner took founder shares. So Harvey took no founder shares.

Shakespeare, that's right. So Howie took no founder shares, but his father's Gibralton Trust's owned company took the shares, which is really weird. I'm not some naive because, oh, corporate structuring, this looks really evil and capitalist. I did structuring deals for IPOs. You're working for one of the largest law firms in the world for many years doing tax stuff. You're not surprised that people are doing complicated things. I know there's kind of straightforward, super simple, complicated, aggressive, and there's mad aggressive doesn't work. And this was mad aggressive doesn't work.

You've seen a lot of complicated things, but this thing struck you as well beyond anything that any normal business person would do. It breaks psychology. And explain to us what he'd actually done in ways that someone normal could understand. So you've found a company, you take shares in the company, if they become valuable, you aim to sell them, make a lot of money, you'll pay tax on it. And there's various ways that people have used throughout the centuries to pay less tax or pay no tax. But that basic thing if you have the shares is part of founding a company. What nobody does is get their dad to hold the founder's share. I mean, it's terrible tax planning because normally there'd be inheritance tax if dad dies.

So you don't want dad to have something valuable. You want to have the valuable thing. And why then do you think, did you begin to conclude Natham Zahari had done this? Well, I think he did it because he wanted the dividends and eventual gains on the shares to be outside UK tax. And how was that going to work? Just explain that the structure that he was hoping would work for it. We don't actually know how to join the dots. We know that when dividends were paid and when there were capital gains on these shares,

they went to his father's Gibralton Trust owned Gibralton Company. We know that bit. We don't know how the money and if the money then made it back to Zahari. I suspect it did through gifts or what have you. But it doesn't matter. The original sin was that this stuff that was realistically Zahawis was held by his father's company. When you get these letters and they're coming after you,

was there a part of you that thought, because a lot of people do cave when they get, you know, you know this from your past life. You know, you get a letter from one of the big law firms and it's basically saying you've got this all. wrong and it's defamatory, et cetera. Was there any part of you that felt like cave? So rationally, you should cave because let's say you're right and you win in court, you would have, God knows how many hundreds of thousands of pounds, potentially a million

pound of costs. If you win, you'll get 70% of that back, 300 grand down. If you lose, God knows how much you're down. So as an individual, unless you're completely crazy, you must cave. That's the stupidity of our libel laws. I didn't cave because I should say everything I do with tax policy associates. It's normally me fronting it, but there's a whole bunch of tax specialists, lawyers, my mates, contacts, former clients who I speak to. And everyone I spoke to about this was certain Suhari was bluffing because the structure was so dodgy. And the idea that he'd volunteer to be cross-examined on it on court and give all the documents and disclosure, so it seemed completely far-fetched. So I knew his lawyers were bluffing. And you actually

went after as the wrong phrase, but you then pursued the lawyers. Well, I didn't. The solicitor This is regulatory authority. Right, but they were done. Not in the way that I wanted, and it all ended a bit sadly. Yet another side-back. How did it end? For me, there is something wrong with someone threatening liable proceedings and lying. And Sahawi lied because his lawyers said that he wasn't being investigated and he was fully

up to date with his tax at a time that he knew HMRC were investigating him and he was settling it with HMRC. So Sahawi lied and that's what he was sacked for ultimately. There's one other thing that she picks up here, which is that he was being investigated by HMRC, but then he becomes the chance to the Exchequer, so in effect he's in charge of HMRC? Strictly no. It's a non-ministerial department precisely for a separation. But come on, real world, you wouldn't want to be an HMRC official negotiating with the

Chancellor of the Exchequer. Any more than you want to be the US tax authorities negotiating with President Trump. It's a mad circumstance. And so his lawyers sent me letters that contain lies. I think that's a big deal and there should be consequences for people who instruct lawyers to do that and for lawyers that do that. The SRA, for whatever reason, didn't take that point. They went after his lawyer, a chap called Ashley Hurst,

having, when he sent me the original threat, said that I shouldn't mention that threat to anyone or publish it. And there would be serious consequences if I did. It was an attempt to silence me. Peter Mandelson. So that was another one where did you stumble upon that? Because what I can't quite get my head around is why it took you, who is, you're not, quotes, really a journalist.

I'm a member of the chartered whatnot of journalists in the NUJ. Oh, yeah. Okay, you are now. But you weren't always. No, I wasn't a journalist until there's a Harley thing. Okay. And then I won the investigation of the year and decided that probably meant I was a journalist. Right, but both, it seems to me that why are journalists not digging up these stories?

Is it because tax is really, really complicated and difficult? Well, the Mandelso thing was sheer luck. At the point that all the US documents were dumped. About Abstein? Yeah. I spotted there was this weirdness around an attempt by Mandelson to buy an apartment in Rio de Janeiro, involving a structure using a Panama company, which was really, it's a really weird thing to do.

And it was a nice little story. And to look into that story, I and my small team built some tech that let us go through the Mandel's emails extremely efficiently. And most journalists either can't do that or within an institution where you have someone else who's the IT guy

and someone else is the journalist, someone else is making editorial decisions. But because we're just a teeny team, we could simultaneously, write that stuff and use it. And so we then found the evidence that Mandelson had told the CEO of J.P. Morgan

to mildly threaten the Chancellor of the Exchequer. If we hadn't done that, I'm certain someone else would have done probably within 48 hours. You think they would? Yeah, absolutely. So that, I guess I had an old-fashioned scoop, but it wasn't legitimately mine.

I was just fast. Tell us about this Panama thing again, because again, you keep coming back to this thing is weird. This seems to be your sort of catchphrase. Yeah, it's funny, isn't it? But it's a way of saying there's something dodgy going on, right? Yeah, I think, and you both know this in areas you're familiar with,

that you can see something and you can say, oh, that's odd. And you wouldn't then make definitive statements about it straight away, but your sense of oddness is what then makes you start looking at it. So it is really odd for a UK person to use a Panama company. Who uses Panama companies? Shipping companies use Panama, flags are convenience for it, very famous. People in South America are looking for a banking out, because if you're Argentinian,

you're really worried the government's going to just nick your bank account or your bank will fail. So you open a Panama bank account. It's a rational thing to do. But here, why would you open a Panamanian bank account? Jersey is nearer, a hell of a lot cleaner. It's suspicious. I mean, you know, without slandering, Mandelson, what are hypothetical reasons why somebody might do this? What benefits could accrue by doing this?

It looked like it was an attempt to perhaps avoid tax in Brazil, perhaps avoid or even evade tax in the UK. I don't know. Madison initially sent me a sort of classic non-denial denial of way where we said he didn't recall it. But we then found the, I don't remember which country it was in. I think it was the Brazilian company that he'd set up. So he went as far as setting up a company to hold this property. I think he didn't then go ahead.

I think he then didn't acquire the property and the Panama stuff didn't happen. Don't know for sure. And we have his signature setting up the company. We're going to come on to the whole wealth tax debate in a minute. But let me just ask this finally on this. Explain really simply what's the difference. between tax avoidance and tax evasion, and do big companies like Clifford Chans do both. Are you going to jail? Then it's tax evasion. It's the thickness of prison wall. So tax evasion is

really easy to define. If you are dishonest and a jury believes you were dishonest by the standards of ordinary people, then it's a criminal offence, you go to jail. So Rory, not telling HMRC about a bunch of income he's received, or HMRC can prove that he knew he received it, can prove that he was dishonest, tax evasion, jail. And tax avoidance? Tax avoidance isn't really a defined term. There's not some little tax avoidance things here and there in the tax code, but broadly it means exploiting a loophole. So Rory finds out that if he paints his front door pink,

he could argue that council tax doesn't apply because of some obscure 17th century rule. He's found a loophole. If that succeeds, that's tax avoidance. If it fails, it's failed tax avoidance, but you honestly believed in the pink door crab. So you weren't dishonest. It's not tax evasion.

Just before we get on to Wells Tax, So, final thing, one of the things famously that people complain about in Britain is that we have this enormously complicated, huge tax code. And there's always been this dream. If you read kind of John Grisham novels, the president's always coming in and he's kind of ripping up the tax code. And I don't know whether it's Singapore or Hong Kong, but somebody's going to have this much shorter, simpler tax code. Is it right we should have a much simpler tax code? And why don't we have one? I give you five slightly contradictory answers. So first one is, we're not Singapore. We're not Hong Kong. We're not a city state. We are a complex country with lots of complex people.

doing lots of complex things. You're always going to have a much more complex tax code. We also have a much bigger state than Hong Kong or Singapore, so we're going to have more taxes to support that. If someone wants to believe that we can halve our spending as a portion of GDP and become Singapore, then, you know, fine, that seems to me a bit of a stretch. Then you could dramatically shrink it, but you can't. So what does that leave you with? There's a true attack on our tax code, which is that over time, like bedrooms, tax codes get messy. If I don't actually sit down and tidy it up, the bedroom will get messier. Sox will end up here, drawers end up spilling over. Tax codes are the same. And for, it's a slight exaggeration to say not since Nigel Lawson, but it's basically true. Not since Nigel Lawson has anyone gone right. We need to sort out the socks. We need to clear out the taxes, which raise almost nothing but complicate life. We need to rationalise the ones that are there. So we just build up lots of little taxes that are politically convenient, lots of special rules, special exceptions, lots of anti-evoinance rules. often relics of tax avoidance strategies from 40, 50, 60 years ago, and they're still there.

No one repeals them. So what governments could do, you could say we are not going to become Singapore. We're in fact not going to lose a penny in tax. But we're going to see how far we can go to simplify and eliminate rules that aren't necessary anymore. And I think they could do that. Big pro-growth step. Well, it's a little pro-growth benefit.

I don't know how ever said it, but it's free. How many things in life are free? I've got to tell you, Dan, when Roy and I were doing a tour of places like the O2, at the O2, and Rory brought up one of your slides about what taxes, Labor were in opposition at the time, what taxes were available. And when the slide went down, and I've already talked to your slide. In front of 13,000 people. Somebody shouted out, more, more. So there is some interest in tax, but you said, so for example, the Labour government did come in, and as you say, I'm a Labour supporter, you're a Labor supporter, the government came in. You've described the

National Insurance change that they brought is the worst possible tax to have done. Why did you say that? I normally never try to make predictions about politics because I have no expertise and I clearly don't know anything. But I great by all that I said that that would be such a stupid tax increase that they wouldn't do it. I'm not making that mistake again. Why is it bad?

So if you increase income tax, you are slightly disincentivising work. We want income tax because otherwise we can't raise anything like the tax we need. So you accept that. VAT is quite a good tax to raise technically. because it doesn't disincentivise work and only has a slight impact on consumption. Employer National Insurance has some very complex effects. Over the long term, the burden is carried by employees.

So if you're a highly paid employee, then if your employer is paying more employer national insurance, highly paid employees, or even just moderate paid employees, will get fewer pay rises. So over time, it bubbles through to them. In the short term, it affects low-paid employees because you can't pay them less because of the minimum wage. So there will be fewer jobs created.

So an increase in employer national insurance is a mess for employers. It damages employment for the low paid, and over time it becomes paid by employees. The slide that I showed everyone on the O2 was you saying, listen, it's a bit mad for the Labor government to rule out rises to income tax, VAT, corporation tax, national insurance, because you've just taken out 70% of the entire taxes the government can raise. Yeah. Explain that a little bit more. It is that chart.

And should I plug the tax policy's website? Go to the tax policy's website. We have more charts. We'll also put it in our newsletters again. Don't worry about it. I'll explain the big point in the way the public can understand. It'll be really nice to think that we could just raise tax from a few very wealthy people. No one in the world does that because if you look at how much stuff they've got,

even if you're taxed at a very high rate, you raise way less than just putting income tax on everyone. And so the UK and every other developed country in the world raises most of its money. money from normal people. Income tax, national insurance, and its equivalence abroad, VAT, corporation tax is about half the size, but it's still pretty big. And those taxes make up about 75% of the tax. The rest of it is sort of a mixture. You've got fuel duties. You've got council taxes pretty big. Business rates. And the government said they're not going to increase those. So you're getting smaller and smaller. And your point was, here comes the new Labor government saying austerity has been terrible. We want to change Britain, but they've just ruled out

70% of the ways in which they could raise revenue to pay for that. And probably more, when you get to the small taxes, they're not going to increase either. So you end up with irritating changes here and there. John Healy, new chancellor, has got a budget in the near future. First of all, do you have a sense that taxes are going to get changed, raised? And if you were advising him, what are the best taxes to raise? Bearing in mind the promises they've made. Or do you think those promises are now tying them to impossible options?

You are going to know so much more about the political likelihood of them doing that than me. I've got no clue. If it was me, if I needed to raise tax, I would look for things that I could do, which are good tax reforms and raise money. Top of my list would be capital gains tax, where I think you can equalise the rate with income tax in a way which is reducing the rate for long-term investment because you create an allowance for the normal returner investment,

create a relief for entrepreneurs. And that raises so much money, probably about 12. billion, you could actually fund a cutting basic rate tax and raise $6 billion as well. Alongside it? I'd do that. I should say, if you handed me a lever now and say, pull this lever, you will turn the UK into Denmark with shiny public services, much higher tax than here, and everyone's broadly happy with what they get for the tax.

I would pull that lever. But it's not where we are. We have a public which doesn't believe they're getting value for money their existing taxes. The government should be looking for a way to cut tax for normal people if they can. One of the other points that you sometimes make, I think, is that. in countries which have better funded public services, more tax is paid by ordinary people,

and that actually Britain is a bit of an outlier in this. We imagine that the problem in Britain is that the super-rich aren't paying tax and ordinary people are paying too much tax, but actually compared to a lot of other European countries, ordinary people in Britain are actually paying much less tax than their European equivalents. So some of the super-rich are indeed not paying enough taxes. We should part that and come back to it.

But thinking about just the normal desiles, the top decile is not an oligarch or anything close to it, what the Torres did is pretty astonishing, which is the tour is redistributed tax in a very large way from the top decal to the lower decals. Now, if you're in the bottom three or four decals, that's more than made up for by welfare cuts. But if you're in the middle, you benefited from the Conservative and Coalition government, and that benefit is still there, and you are paying less tax than you have historically in the UK, and less than your compatriots and other developed countries. So paradoxically, this Tory government ended up with the wealthier people actually paying

slightly more tax and poor people paying slightly less tax. Higher earning, yes. And there's a bit of a tacit conspiracy not to mention this. The Tories don't want to say we were a radically redistributing government. And Labor doesn't want to say all those Tories, they distributed very effectively from the top desal. And is there any way of illustrating the comparison to give people sort of sense of how much people are paying in terms of lower income people paying tax compared to Denmark or Sweden? Sure. I mean, it's the personal allowance is kind of everything, that no other country has an equivalent

to the personal allowance. If you look at the tax paid by someone earning the equivalent of £10,000, anywhere else in the world, you will see that they are paying, so 10, 20% of their income in tax. Here you're paying nothing. And it's a really big change. We plug for the Tax Policy Associates website. Again, we have a chart showing the effective tax rate at different income levels across. the world, and the UK is on the zero for the first 12 and a half grand, and no one else is.

And it's remarkable. There are people who worry about it and say, well, it's been anti-growth that top death I was paying more tax. I have not seen evidence for that. It may be true, it may not be true. It's a pretty impressive achievement. We've increased tax noticeably across the economy, but the medium voter hasn't directly felt that. And it's something else we can get into. People definitely feel they have. Hey, this is Michael and Hannah from Gollhangers. The Rest is Science. This episode is brought to you by Cancer Research UK. When we talk about beating cancer, we often focus a lot on survival, and that can mean

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Cancer Research UK, their research and breakthroughs and how you can support them, visit cancerresearchuk.org slash rest is science. Any windfall taxes you can see on the horizon? Winful taxes are funny things. So a windfall tax is economically a great tax because it doesn't distort behaviour if the subject of your windfall and everyone else thinks it was a one-off, not to be repeated.

So the tourers had a windfall tax on banks in 1980 because, broadly speaking, interest rates had gone bananas, but the banks were not paying interest on very large numbers of deposits. And the tourers said, right, we're going to tax you and kind of claw that benefit back. Labor had a windfall. tax in 97-98 on the privatised utilities, which said you were sold off at a ridiculous undervalue,

we're going to claw that back. And both of them are accompanied by promises that would be a one-off not repeated. And those promises were kept. They were good windfall taxes. Who believes that a windfall tax today on, say, I don't know, the banks or water companies or someone? Who thinks that wouldn't be repeated? What would it be?

What looks ripe for a windfall tax, though? You mentioned banks, you mentioned water companies, oil companies. Is there a possibility of a win-for? Because I'm trying to work out with your slide in mind where he goes, whatever the sort of money is going to have to raise. I'm not sure there's an obvious win-fall. To me, an attractive option to look at,

and it's convenient for me because it's outside my expertise, is the way that the banks place deposits with the Bank of England and get interest on that. And whether you can tear it and not pay interest on some tiers is something some very smart people think could be done and could raise billions, not the very large figure,

I think 30 billion that reformed, claimed you could raise, not those communist at reform, I think, would cause serious difficulties of the financial system. But you could raise some serious money. Rachel Reeves was against that, whether that's because of her background in the Bank of England or otherwise. And I don't know enough to judge it, but it's something you should look at. Can we just get then to maybe the heart of the issue, which is this very weird thing that you've just said that actually compared to other countries in Europe, higher owners are paying comparatively more tax and lower owners are paying zero tax up to other. And yet,

Yet that's not how people feel. People in Britain feel it's an incredibly unjust system. They're paying far too much tax. And that actually it's in a massively unequal society where the rich are getting away with murder. So explain what's going on here. If you look at the research that has been done on the tax paid by people on very high incomes,

and there's some great stuff done by Andy Summers and Aaron Advani on this, you find that people earning millions of pounds, their average tax rate is about 30%, which is less than the average tax rate of someone earning 100,000 pounds. But that's deceptive because breaking that apart,

a quarter of the people earning millions are paying the full 45% and more. So say you're a banker. People think bankers avoid tax, bollocks. If you're a banker receiving a bonus, almost no way these days that a sane bank is going to try and avoid tax on that. Huge amount of tax is being paid.

So a quarter are paying 45%. Some are paying almost nothing. And the main reason for that is capital gains, tax, the rate being so much lower. Now it's gone up since this work was done. So the effect is now a bit less. But still, if you can magic your income into a capital game, you are reducing your rate of tax from 45% or 47% down to 24%. So there you're saying, there you're making a point that there is a real thing to grumble about, which is that rich people not paying tax.

But there's another issue, which is the sentiment amongst people that they're paying far too much tax when you're actually pointing out that ordinary people in Britain are paying significantly less tax than their European equivalents. So why do they feel that contrary to the evidence? The only tax where that's, which essentially has gone up in the way, is council tax, which has gone up quite significantly, and that's largely been driven by social care and also driven by government, central government cuts. So part of that low income tax was bought by slapping tax, slapping spending cuts and local authorities forcing them to raise council tax. That's one reason. But I tend to think it's because of the cost of living going up, because of earnings not rising as they

should have done because of bad growth, because of housing. I think it's other stuff, so people notice the tax more. So let's get to the wealth tax. You appeared on Gary Stevenson's documentary. Yes. And I got a very, very strong sense you weren't terribly impressed by his ideas or he's thinking about them. We interviewed him and we've also interviewed Gabriel Zutman.

Gabriel Zookman's a very serious figure. What I say about both of them is that they're not politicians, they're not Chancellor The East Chekker. They're people who are trying to shift the political debate. They're trying to shift the dialogue on it. And yet I got the feeling that there was something in you that got really quite, and in Rory, actually, they got quite offended by this idea that they think all you need to do is have a wealth tax. Why do you feel so viscerally that this idea is not really even worth contemplating?

So Gavin Stevenson was saying the other day, he didn't say this in my interviews, more recent thing, he was saying that if we don't introduce a wealth tax, then we are going to become so poor that our grandchildren will be homeless. That's not an indirect quote. So he's painting this apocalyptic picture and saying a wealth tax can fix it. Hang on. The wealth tax he's proposing,

best case, less than 1% of GDP. So something's really wrong. There's a gap between the apocalypse he's telling us is coming and the tool he's choosing to fix it. So immediately you should be going, hang on, what's going on? And what's going on is that the wealth tax

is a brilliant slogan. it plays great on a t-shirt and it becomes an alluring thing and people get so wrapped up in that alluring thing they forget to step back and say actually what are we achieving here and what bothers me about a wealth tax I think several things bother me

one is that the kind of inequality that I'm most concerned about is not touched by a wealth tax and that the oxygen that the wealth tax is sucking out of a lot of people in progressive politics could be devoted to tax reforms that actually have a chance of happening and could make a difference

that's the main reason for my anger and I will confess to anger about it. And yet why did you seem to separate out Gary and Gabriel Zutman? Why do you think Gabriel Zutman's a more serious figure on this? Because he's arguing for much the same thing. Well, he's not. He's arguing for something slightly different, and we should get into that. But Stevenson, I don't think, is a serious figure

because of these ridiculous apocalyptic claims that he makes, because he's never thought about how wealth tax would work. Because he can't, I don't know if he did this to you, but when he interviewed me, he said on about six occasions that he was one of the least, leading inequality economists in the world. People who are leading anythings don't normally say that. Certainly don't say it six times.

And all of this made me think that he was someone who I was uncomfortable speaking to. What is Zuckman saying then that you think is a least respectable? Zuckman has done a lot of impressive work on inequality and economics. And so he's bought the right to be taken seriously in a way that I'm sorry Garen Stevenson has not. So I don't regard them as part of the same conversation. Zuckman is no longer calling for the wealth tax that most of people on the left are calling for. They're calling for 2% on everything over 10 million.

There are many problems with that, but the problem that I think bothers Zuckman most is that's a really big complicated tax. It will take three, four years to put in. You'd have to value vast 20,000 people's property will have to be valued every year. It's a huge undertaking. So he's now proposing something narrower. I think it's on wealth of 100 million plus, only 1,000. people. It raises much less.

She's looking at raising about 0.4% of GDP. He's also got this idea that you could try to stop people leaving the country and you could look at. Yes, you were particularly unimpressed at that, Rory. Yeah, I mean, but I wonder actually, can I just follow up with one thing that struck me that she said that was very interesting? You said, this isn't addressing the type of inequality that you really want to address. Yeah. Explain that. People on the other people on that for saying, inequality is going up. But that's not good enough. You've got to look at specifically what they mean.

I should preface all this with, I am not an expert on inequality. So take all of this with a pinch of salt. Look at Jeannie, the thing usually used to measure inequality. That's been kind of massive rise in inequality in the 80s, pretty static ever since. Within that there's a lot of noise. There's a kind of noise that people like Stevenson worry about, which is billionaires. And Zuckman is exercised about this. The interview he did with you, he seemed to think he was in New York.

All of his examples is all American billionaires, it's Musk buying political power. Jeff Peasel is getting benefits, yeah. Yeah, it's a pay. And I'm getting way away from tax. My pet hates in politics is people importing American controversies here. So one of your points there is actually very wealthy people in Britain do not follow the same rules as in America. So talking all the time about America doesn't really help you think about how to deal with people. We don't, I mean, I'm not saying there isn't a problem with rich people in politics in the UK,

but it is nothing like the US. The amounts of money involved are incomparable. And Musk, who I regard as a pretty detestable and dangerous figure, there is nothing our tax system can do to stop him. So don't build a tax proposal on stopping Musk. Okay. You look like your discreet. No, no, I'm thinking that they have, something like Bezos, for example, I think does have an impact upon our tax system

because he is the owner of this huge Amazon thing which kind of takes so much out of our economy in different ways. Oh, corporate tax we can talk about. But the billionaires behind it, I think that is an American phenomenon. And the way in which... And the Americans will know. This is what I said. The Americans are never going to touch this. Yeah, I've been to the American the other day,

who disagrees and thinks it's possible you'd end up with it at a Democrat president. and Democrat House and Senate. And they could have. I hadn't heard that before, but he was a serious guy. Who knows? Well, Bernie Sanders has been on this for a long time. He definitely has. But the other thing about America is it's very easy for billionaires to pay no tax.

You'll have heard about this sort of buy, buy, borrow, die strategy. You make a fortune. You have all of your stock in what was your personal company, has now listed. You own a huge chunk of it. You borrow against it. You don't pay tax. You don't die. There's no tax because American estate tax is so hilariously avoidable.

Here, that is a shit. strategy because you would have inheritance tax at 40%. The UK's strategy is give it away, have a capital gain. So as long as we have a capital gains tax, which isn't leaky, and an inheritance tax that isn't leaky, we don't have the US problem. Back to the inequality, you're worried about in Britain and how you would address it. So the billionaires of inequality worries me less. A lot of it is people who are foreigners, come here for a bit, leave for a bit.

It certainly creates a mathematical inequality, but does it harm people's day-to-day lives? I'm not sure it does. The inequality, which is a huge problem, is the generational inequality, which means that today the ratio between capital and income is twice what it was in the 90s. And that is because, to put it crudely, there are old people with incredibly valuable properties, and there are young people who don't have property. So the inequality is between the 60% that own property and the 40% who don't, which also corresponds largely with older people against younger people.

I don't want to sort of set people against each other in a way that implies I'm sort of picking villains. But, and I don't quite buy the housing theory of everything. There's a fantastic paper on that that people should look up. But I think that the housing theory of quite a lot, I do buy that a lot of the disquiet among young people is caused by the fact that it is essentially impossible from the housing letter. I'm going way away from expertise here and no one should believe anything I say without checking all of this themselves. But I worry an awful lot about property inequality, which the wealth tax does not touch. Isn't there also a problem in our in our politics and the way that our media debate is as well.

And I think, you know, Mrs Thatcher, who is one of the most consequential figures of our lifetime, I think, is largely responsible for this, and we'll be proud to be responsible for this, is that we don't really make the argument for tax. We always want to make the argument for not having tax, for not paying tax. You talk about Denmark, what the Nordics have always managed to do

is to say, tax is neither good nor bad, it's essential. And we seem to still be trapped in this debate that tax is bad. So, you know, if you, from maybe putting your Labour Party hat on, as opposed to your tax taxisb. How do we get this politically into an easier space? Because I can see the Andy Burnham, John Healy government coming up against some of the same problems that K. Starrman and Rachel Reeves did. Yeah, the left in this country is anti-tax. There is almost no one on the left who says, I want a welfare state like Denmark, and it should be paid like Denmark by everyone paying more tax,

which is the only way you get a welfare state like Denmark. But if you're a welfare state like Denmark. But if you're not willing to do that, then you are admitting defeat on what should be the long-term aspirations of many people on the left. It drives me crazy. I don't think you can get there from here because of the attitude people currently have to tax. Which is why I think we need a period. And again, I'm going way outside my tax roll. I think we need a period of government competence. And we need a period of an actual tax cut that people feel and appreciate.

Another thing that I was wondering about listening to you talk about Pickety or Gary Stevenson, this kind of things. is what is the objective that's happening? And just to lay my cousin table, I mean, our producers, a lot of our listeners, absolutely love Gary Stevenson, love Zuckman, loves Janice, a bit reluctant to get you on because you're not saying what they want to hear.

What I'm trying to work out is what is the objective with these wealth taxes? Is it that they think this is the best way of growing the economy? Is it that they think this is the most efficient way of raising revenue in order to fund the NHS? Is it that they think this is going to reduce the genie coefficient or is it just a way of bashing billionaires?

I mean, what's the thing that's driving this? But it's none of those. Best case, it raises not enough money to fund the NHS for more than a couple of weeks. Pro-growth, absolutely not. There are medical studies suggesting with a wealth tax gentler than the one proposed here would knock something like 3% off GDP. It's anti-growth, anti-investment, a whole bunch of problems with it. It certainly wouldn't change Genie one bit because it's aimed differently. Would it make billionaires pay more tax? Sure, if they stuck around.

And another, my list of the many things that annoys me is the billionaires will leave argument. The billionaires won't leave because a billionaires are barely here. A billionaire will typically have houses in several countries, spend a few months here a year. If they decide they want to cease to be tax resident here, it is a small change in their itinerary. If that's all true, what do you think?

I mean, Gary Lennon has just signed up for this. Brian, you know, so it sounds fucking great. It's a fantastic slogan. You remember the financial transaction tax post. the financial crisis. All the NGOs, Oxfam and all the others were pushing for financial transaction tax. And the nerds, and I was among them at the time, were saying, really, it's actually, it can't work. It's not a good idea, but they went ahead with it. Millions were spent advocating for it. The EU spent five years trying to do it, and then concluded, it can't

work. And they didn't do it. And it's happening again. People are so overcome by their own eloquence and so drawn to this brilliant idea, which opinion polls so fantastically, they don't want to think about whether it actually works. Stevenson had never thought about that. I'm not sure if he's the editor of the new statesman, but he's something of the new statesman who published a piece yesterday, which was essentially saying that the whole Stevenson-Be-needled thing,

Stevenson has political imagination. Full stop. That is all that matters, whether it works or not, it makes you a neoliberal, for even thinking about it. Give us a chance for political imagination. Give us a chance. No, political imagination, absent evidence, is a dangerous thing.

It's populism. There are people who have political imagination and rationality, you work for one of them. Sunak, a bit lacking in the imagination, but to have someone who is pure imagination and no rationality is to have a populist. I still think there is a place for Gary Stevenson and definitely Gabriel Zuckman in this space, in this debate,

because in a way, although Gabriel Zutman babysets himself up as the guy who will show you how this can work, there is a need, I think, for us to constantly have this debate about the reality of inequality. With inequality, because I always felt this in Cumbria, when people were talking about inequality, what is really angering people? So the thing that really angers me

is the conditions of probably the poorest, let's say, 5, 10% of people in the country, people who are homeless, the poor elderly, people who are genuinely living completely miserable, undignified lives. The thing that actually shocks me is the gap between the top 60% kind of people I was out in the park run with in Scotland, Cumbria,

whose lives may be tricky but are still, by historical standards, pretty good and the people right at the bottom, the bottom 10%. But that isn't usually what people are talking about when they're talking about inequality. They're not trying to help those people. The people who are grumbling and not the bottom 10%, who often don't even vote, right? Homeless people aren't voting, prisoners aren't voting. Prisoners can't vote.

It's actually sort of 30, 40%, people, angry with billionaires. I mean, it's not really about... Yeah. If you read Angus Dieton, his report on inequality, his recommendations about inequality, only a small amount of it is about tax. It's about geography.

It's about opportunities. It's about education. It's about training. But wealth tax is a good slogan. When I think of inequality, and what I think most of the people, kind of in my sort of mindset, think of inequality,

is that there is such an phenomenal gap now between an accepted level of wealth and an accepted level of power related to that wealth and it's got further and further away from people who have no sense of even what that life might be like and that's what is leading to a sort of sense almost of societal breakdown. I think it's more complicated than you're saying.

I think it's actually that people do care about the very, very poor. But there's something about the gap between those three strategies, strata of society that politics doesn't seem to be able to bring together. So it becomes easier for people who are reasonably well off to say well my life's not as good as I want it to be therefore I can blame people who, you know, the really rich

bastard who we know doesn't pay any tax at all. And where you're also right, I think, is it means often the people at the better bottom get literally completely forgotten. Does that make sense? No, that is plausible. This is where I'm with you. I understand politically, having been part of campaigns that have done exactly the same thing in the past, why Keir Starman and Rachel Reeves put it in their manifesto, we're not going to raise this, we're not going to raise this. Because we have still, we're still trapped in this Thatcherite taxes, bad debate. So I want somebody, I think Andy Burnham might be the guy, to come along and actually say,

look, if we want the sort of public services that we all think the Scandis have, then we can't just pretend that a bit of taking. And there the answer seems to be, if you want the kind of public services the candies have, ordinary people are going to have to pay more income tax. If you want to raise that kind of money, right? It's the only way to do it. Income tax raises over 200 billion. The most ambitious wealth tax proposals think they'll raise 24 billion, if they're lucky. So if you want to get up to Scandinavian levels of spending, 52, 53% of revenue spending, everybody's tax got to go. You're not going to be able to get it from the very rich. So there's two different things. One of them is the inequality

point, which is we don't like the fact that there's very rich people who aren't paying tax. We'd like to get them as a moral thing. But then get them, get them with inheritance tax, get them with capital gains tax. Yeah, this goes back to the Thatcher thing. There are still people right across our society who think that people who are poor either choose to be poor or deserve to be poor, okay? Whereas they're very, very wealthy, they're unbelievably clever. They're incredibly smart, and that's how they become wealthy in the way they have.

And often it's not the case. When you talk about inequality, a lot of it's about inequality of background. inequality of within education, it's inequality in housing. So I think we've got to, we've got to break out of this Thatcherite tax bad, tax is always bad debate, and we've got to be honest about the trade-offs between the sort of country that we all keep telling ourselves we deserve and what actually we would have to put into that. And I also think maybe we want to not always get fixated with this phrase inequality because there's something always dishonest about it. I felt it when I was in the House of Commons.

was saying, we're against inequality. What do they really mean? I mean, did they actually mean, literally they want full equality of opportunity, equality of income? They want a slightly more equal society, right? But there are so many other things that you also want. You want growth, you want good public services. And then there's the inequality nobody's talking about, which is sub-Saharan Africa, where people are living on $1.52 a day. They're dying at 40. So if people really morally cared about inequality, we'd be talking about international development, we'd be talking about. So I don't buy this idea that we morally care about it, because I don't think we're looking after the bottom 10% of Britain. I don't think we're looking at the poor as thing. I think it's

a loss of this as resentment against the perception that there are these very rich people at the top and people don't like it. But it's, but the tax things being proposed on wealth are not making, I don't think, likely to make the country better. They're just, I suppose that's why get wind up about it. I get the idea. It's kind of let's have a go at this lot and it's going to make it weren't up about it. The Gary Stephen's debate, the Zuckva debate, Lao, Lao. No, but I think you can

look, it's possible to I see, I don't see inequalities we've all got to be, you know, measured in the same way. I don't see it like at all. But I think where you have very large sections of, you know, a sizable minority in this country who

literally are denied the sorts of opportunities that we completely take for granted for ourselves and for our kids. I just think... But then we should fix that. Yes, I agree. That's the big question. And that requires you to raise money and that part of that is tax from all of us. So what I'd like to do is see tax on from up here go up and go and down here disappear.

No, no, no, no, no, no. What Dan's saying, you see, this is what we're not listening to. What Dan's saying is that if we actually want to fix problems for people down at the bottom, they have to pay more tax. It's not that the rich need to pay more tax. It's a pyramid like this. You're not going to get the money by just taxing the top. That's not exactly.

So you're saying that in Britain, one of the weird things is that people under 12,500 don't pay tax. If you want to generate the tax that you have in Scandinavia, even people under 12,500 have to pay 10, 20% of different benefits. Hold on. And then then work becomes literally pointless because you can get more on benefits. You have to change benefits as well. Exactly.

When you get to the bottom three decibels, he would be very careful just looking at tax and isolation because the effect of the benefit system becomes very important. I'm not a benefit specialist. But certainly, if we wanted to become a little bit scandy, people on median incomes would need to pay more tax. There is no other way to do it. I don't think currently that there is a mood in the UK

that makes that politically possible. I could be wrong. No, no, exactly, because I think, Alastar, your instinct is that you could get more revenue by taxing just the top of the pyramid, rather than getting the median incomes harder. No, I'm not actually saying that. I think you really, we read, look, Gordon Brown, when he was Chancellor,

I think he did everything he could, all the tax loopholes and avoidance, and he really tried to do that. There was a dramatic change in avoidance. My claim that bankers don't avoid tax and bonuses, I'm sure lots of listeners won't believe, but they're wrong and I'm right. In the 90s, totally different, and Gordon Brown utterly changed that landscape. Exactly. So that's one place where you can do it.

But we've kind of let go of that again. And I think it's all, it's back to this point about we kind of think there's something about it, look at Trump, there's something smart about getting away with we're not paying your tax. We've got to make a moral case for taxation. And I think if you did that, we could start to win an argument for the sort of redistribution that actually I think you believe in, I believe in, and I think most people in the Labour Party believe in, but we've locked ourselves in with these promises that we keep making,

We made them as well for political reasons. But if you don't make them political reasons, you never make the political argument you need to make. Well, and if you only ever put up tax on the top desal, then... You won't get the money you need. You won't get it, but also you're teaching people that taxes something paid by other people.

Count Binfaces best policy by far is... I think his first policy is, I will cut your tax and increase tax on everyone else. Yeah. And that's great for him. Other political parties should not have as their slogan. But they all bloody do. It's a great joke.

Well, there we go. Who should we have on next to talk about? But thanks. Dan, thank you very much indeed. Thank you very much. So come on, Roy. I mean, this is just getting a bit strange. You're normally a very calm measured, but honestly, sitting alongside you, I can feel this vesuvius rage building within you whenever we get onto talking about inequality. And you, what have you got against addressing inequality? What's going on? Look, I mean, I was up. half the night worrying about this. So we're recording this wrap up the day after the Dan

Needle conversation. And you're right. We did a really lovely main podcast and question time when we were very calm the day before and then somehow I've got back into this Zuckman thing. So let me try to, this is what I thought at 3 in the morning. Okay. So firstly, obviously, I come from a privileged background. So there's a problem about my discussing this stuff because I'm at the wrong end of the inequality. In my defence, I also spent 10 years as a civil servant, 10 years the minister, and I've worked on extreme poverty in Afghanistan,

and I've worked to give directly in Africa, etc. What I think I care most about, whether I'm in Cumbria or in Afghanistan, is the people who are really suffering, who are the very worst off in society. And I talked about homeless and poor elderly. I probably would have added people with severe mental health conditions. I mean, the sort of people who,

when I was walking around my constituency, I knock on a door and they open it, and I'm shocked that people like that are living in those conditions in Britain, which means, I think, that I care deeply about revenue. Where do we get the money to look after those people and prioritize those people? Which brings me to the countries I admire most, which are Scandinavia. And the point about Sweden is that it's abolished its wealth taxes. It doesn't have inheritance tax. It taxes capital, very lightly. What it does instead is it taxes people on median incomes heavily. And that's uncomfortable for you and me and most of the listeners to the show, because it means professionals in Sweden pay much more tax than we do. So I would like a system which was more Swedish,

where you and I pay more income tax, and not just you and I, but actually people on median incomes pay more income tax so that we can look after the worse off. And I'm telling you, terrified that we are driven by an idea that if we just put a wealth tax on the super wealthy, that would solve problems when I think actually it's going to make us poorer. There'll be less money for the government to spend, and the people at the bottom of society are going to end up being worse off. But the final thing I thought, I don't like, is your strongest point is about the way in which wealth translates into power,

and that what I'm not thinking about enough is the way that privilege and wealth, wealth isn't just a question of how you raise revenue or look after the worst self. It's about how the wealthy dominate politics, dominate media, entrench privilege for their kids, etc. So that was my best attempt. Okay, ever do you? I think there's a lot going on here. So, for example, the reason why I still feel there's something in what Gary Stevenson and Gabriel Zookman. And it was interesting how Dan wanted to separate them. And he'd obviously had a very bad experience with Gary Stevenson, and clearly doesn't like him. So you and I probably think that Gary Stevenson and Gabriel Zookman

in different ways are arguing for the same thing. Let's tax extreme wealth, if there can be such a thing as extreme wealth, which I think they can. You said recently, we were talking about Elon Musk when he became a trillionaire. You were saying, you know, why does he want it to be a true? Why does he need all this money? What's he going to do with it? The other day on the podcast when I read out,

Sadi Omani, the Liverpool footballer, who was explaining why he doesn't want a Ferrari, he doesn't want a fancy watch. He just wants to give money to people who don't have money. And you were sort of moved by that. And you thought that's exactly right. You've got lots of money, give it away. I look at somebody like Musk and, in fact, all of these people.

And it's, okay, they've got foundations. And, you know, Jeff Buse was his ex-wife. It's one of the biggest philanthropists in the world. It's almost like we're supposed to respect them because they've beaten the system, right? Whereas what we should be doing is saying, we're all part of the system, and we shall contribute to the system.

And I do think it was, I found Dan very interesting because I think that he's not just to kind of, you know, a lot of people think the problem with Gary Stevens and Dan Needler is that they both think they're absolutely right all the time. And they've got a very clear vision of how this thing should work. But actually, I thought it was interesting about him. He is clearly quite left wing. And yet I think he's just wanting us all to understand

that tax is complicated. Most people find it very, very boring. But we can't live without it. So then the question is, what are the choices we're going to make about tax? So what I think all three of us feel is for political reasons, which we all understand, the last Labour in opposition made certain promises on tax, which have made their life more difficult since coming in. Andy Burnham, the day we were doing the Dan Needle interview, Andy Burnham was talking about social care. And he was talking about the need to, you know, political capital. What he means by

that is making difficult decisions. That will probably involve tax. But we're so trapped in this debate that says if you put taxes up on anything, somehow it's a terrible thing. So that's when the whole stealth tax thing comes in. A little bit here, a little bit there. So where I'm with Dan Needler is I think we've just got to occasionally bite some very big bullets and say if we want Scandinavian type public services, we're going to have to pay for them. And if we pay for them as a society, that's largely going to be done through taxation. Then I suppose maybe there are two other things that are interesting here.

One is that there's a real, I share your kind of the fact there's something really disturbing about the way in particular American tech billionaires behave and also the way the United States is structured in terms of the kind of power that someone like Musk has. I suppose within Britain we have to be asking ourselves what is it that we in Britain can actually do about BISOS or Musk. You had points about Amazon corporations and who are British billionaires and what are they doing? So Dan had two different sort of points there. One is that there's been research that as people get wealthier there, effective rate of tax decreases to about 33%. So you do capture much more than in the United States, the wealth of billionaires, through inheritance tax and capital gains tax.

They can't get around that. But the capital gains tax is still lower than income tax. So I think he'd be a believer in putting that capital gains tax up. The second thing is this difficult point that he's making, that 70% of the revenue of the government comes from things like income tax and national insurance and that if you want to increase that, most of that is going to have to come from the middle of the pyramid, not from the top of the pyramid. That's where the real numbers are. And my final thing, I don't know why I get so wound up about this, but my final thing is that we should probably

get back to describing the kind of societies that we want to live in. And I think they are quite Scandinavian. I think probably you and I would agree that maybe inequality isn't quite capturing everything because there are a lot of billionaires in Sweden. It's a more equal society, but there are a lot of billionaires. Sweden's got more of them than Britain has. I think what we're trying to do is work at how do we get, they're not perfect societies, but how do we become a bit more like Sweden or Denmark or Finland or Iceland? And if we set that as our goal, then look quite close at what they actually do rather than inventing some other solution, which often, like wealth taxes, they've actually tried and rejected. And don't forget, we shouldn't run away with the

idea that there's some kind of navarre there. There isn't. All these countries have got problems. And, you know, we talk a lot about the right-wing populism. Right-wing populism exists in these countries as well. When we were in Finland, for example, a couple of things that really struck me. The first was they trust their leaders and they trust their institutions. The fact that we trust our leaders and our institutions less and less. Now in some cases

we can point at trust, we can point at Johnson and we can say well that's because they're the leaders that we had. But we chose those leaders, right? The institutions that we keep decrying. Why do we trust them less than we did? Is that about them or is it about us? The BBC

for all it's false is still an amazing institution. The NHS for all its challenges, it's an amazing institution. You know, your friends are the monarchy? It's an amazing institution. Why are these other countries able to trust their institutions and their leaders much more than we do? And I'm afraid I think a lot of it is about the media. It was very interesting watching Andy Burnham talking about social care. And he wasn't whinging, he wasn't whining, but he was basically saying, listen, I'm trying to start a really big debate here about something that we have to. to do as a country. Is it possible we can have this debate without exaggeration, misrepresentation,

screaming headlines that say things that aren't true to try to kind of drive us all apart? What you have in Finland that I sensed within the debate, and you've got, you know, you've got big debates going on, but you had a sense that they were all desiring to have outcomes that would benefit everybody, and they were believing that was possible. The thing that most impressed me was the fact that they've now got 900,000 Finns as military reservists. Now, what does that say? That says they're all, they all get the state of the world, and they feel they've all got a responsibility, not just the government. Whereas, you know, here we just, we don't have that mindset.

Well, there's something you've put together there, isn't it? These are more equal societies. They're societies with better public services. their societies with more trust in government, and their societies where actually citizens are prepared to sign up for national service and risk their lives defending their country. These things connect.

So I wonder whether part of it isn't that they're taxed more, they spend more on public services, but they get a better quality of public service. So my idea might be there's a threshold, that until you're getting public services of a certain quality, actually you're not really prepared to pay tax or trust your government, and that maybe we're in the worst of the worst of, all possible worlds, which is that we've kept our tax so low and our public services so

understrained that we're always crossed with our public services and crossed with our government and therefore not prepared to give them more tax, that you either do it properly or you sort of don't do it at all. Our problem is that we're stuck in this, I mean, it's a horrible cliche, but we're stuck in wanting American levels of taxation and Swedish levels of services. Yeah, you have to make a choice. But I go back to my point about Thatcher. She won this massive argument about what sort of country we should be. And part of that vision for this country is low tax is a good thing. Now, low tax is fine, but if I would argue that that approach and that mindset is what has led to our economy not being as strong as it is, because these other

countries also have pretty well performing economies. Now, Norway is an exception because of the, you know, but again, that was classic. What did what did we do with the oil money? Thatcher gave these huge tax cuts to people who were already pretty well off. What did the Norwegians do? They put it into a sovereign wealth funder than now one of the richest countries in the world. I just think that what we're grappling with is we want to tell ourselves. We still do. The Labour Party does this.

You know, we're so proud of the NHS. It's the greatest achievement of the Labour Party's greatest achievement in history. That sense of nostalgia about it sometimes makes us overlook some of the things we need to do to reform it to make it deliver better for people who most of this population who weren't around when we were all celebrating the birth of the National Health Service. So in all of these debates, it's always like we're having phony debates. And one of them is, tax is bad, and the other is our public services are great. Neither of those things are true.

And then my final contribution is priorities. What is it we're trying to do here? and I think what we're trying to do here is address extreme poverty and suffering in Britain and get good public services. In order to do that, we need to generate economic growth, we need to have good businesses, we need to simplify the tax law, we need to keep entrepreneurs here, we need to invest, and we need to tax people. And I think that's a more sensible way of thinking about it than just getting stuck on the word equality, inequality, which I think can lead you, in seven or eight quite different directions with quite different choices

if you're not clear about what the priority is because I think you could have very few billionaires but a poorer country where the poorest are worse of you could have as Sweden does billionaires but actually people looked after properly in public services operating and this is why I think I guess Dan Needle and I are probably a little bit kind of new labour on this so we're sort of hoping that

you can preserve quite a lot of the, what used to be called the capitalist system if you manage it in a way that helps the worst soft in society and builds good public services. Well, we'll have to keep coming back to it because, you know, as your, as your therapist, Rory, I think we've really got to drill down on, there's not much that gets you, look, I'm quite a big guy and I can sort of look out to yourself, but there were times when I was thinking, God, if he suddenly decided, I'm the person at his sight, and I need to hit somebody, it felt quite...

And it's not pleasant for the listeners either. I'm going to have to get a grip on this. Anyway, thank you very much, and thank you Dan Needle for joining us. All right, bye-bye. Bye-bye. Yeah, see you soon. Real Canadian Superstore has everything you need this back-to-school season. Save on lunchbox savers, like Ziggy's sliced deli-me meat products for always $3.75. And get life brand pure Vita shampoo or conditioner for $8 each.

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