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Documentary, BBC The Super-Rich and Us - 1. Episode 2
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00:00the super-rich are taking over somebody like me earns ten twenty thousand dollars an hour 85
00:14people own the same wealth as half the world's population you don't get this stuff that ikea do
00:19how much are you worth around 250 million pounds never before has money been so polarized
00:29at the 21st century will be the most unequal period in human history my name's jack peretti and in this
00:37series i'm going to find out how the super-rich have changed britain explain how important britain
00:43is as a tax haven for the super-rich it's very important it's the most attractive location now
00:49on the planet but are they making us richer we want more super-rich people here in england or
00:57creating a more divided society we went to see our local labor mayor and he said to us if you can't
01:05afford to live in them you can't afford to live in them what do you want me to do about it human nature
01:12will always be a little envious of those who have more than they do who sold us the idea that the
01:20super-rich would make us better off there's always been the haves and the have-nots but today you have
01:27the have the have-nots and they have yachts this is the story of the super-rich and us
01:33as the rest of britain struggles the super-rich have never had it so good since the 08 crash there's
01:53been eighty billion pounds of austerity cuts the same amount bankers will have been given in bonuses
02:00just over a hundred and eighty thousand pounds this lamborghini cost the same as an average house in britain
02:12simon has flown in from switzerland to buy a second-hand car but not like one you or i might buy
02:21you collect cars how many cars have you got would you say do you know i don't know my wife's listening
02:28or not but let's say less than 10. less than 10. the super-rich are behaving as if the biggest recession
02:37since the war didn't affect them but it did profoundly they made lots of money from it
02:45hard to believe until you hear it from the horse's mouth michael wainwright is the boss of diamond
02:51merchant boodles his family's reported 85 million pound fortune is among the thousand biggest in britain
02:58when the crash happened did you think oh this is curtains for us or you know how what was what was
03:03your feeling well we were it was very bleak for about three or four months and in spite of what's
03:08gone on in the world since 08 i think the wealthy have probably have got wealthier there's a bit of
03:14reticence to spend it to begin with after 08 but not now i think they're definitely out to play again
03:19yeah michael might have had a bad few months but we've had seven years of austerity our incomes have
03:26stagnated but last year alone the top thousands saw their wealth rise by 70 billion pounds making
03:33their wealth equal to the combined annual earnings of britain's entire full-time workforce the gobsmacking
03:41gap between us and the richest one percent is returning us to a world we thought had gone away
03:48you know when i was growing up in the 1970s the idea that the aristocracy ruled britain had gone they were
03:55finished but now there's a new aristocracy who have taken over and they're not the landed gentry they're
04:01the super rich britain now has 104 billionaires that's more per head than any other country in the world
04:11but when you ask how their presence benefits the rest of us it turns out that the rich have a party line
04:17on that it's called trickle down this is multi-millionaire rob hertzoff are the rich good for britain yes
04:27very good for britain we want more super rich people here in england why because if they invest here
04:36if they hire people if they use taxis if they go to restaurants they're creating wealth for people in
04:45england it's not trickle down it's trickle through you know they're creating opportunities for other
04:52people trickle down or trickle through the idea is that their spending will benefit all of us
05:00but does it i've come to a high-end showcase for super watches to find out
05:05that looks amazing so if i wanted to buy that how much would that set me back only 215 000 215 that's
05:17a bargain please that'd be great thank you
05:26so here we have metamorphosis two metamorphosis two
05:32what was metamorphosis one like metamorphosis one was amazing and this is now better on an even
05:40higher level we've separated the hours from the minutes yeah and then here you actually have your
05:46date that's just insane now how on earth can i tell the time so at the moment it's very simple
05:52that we're now at 20 to 8. so in a way right the only people who understand how this watch works
06:00are the people who own them right yes so it's a bit like a private club exactly
06:05can i try it on of course you can right
06:13wow that is
06:16how does it look
06:20i think i might i think i might just make a move all right i'll see you later
06:23and if you thought that was ostentatious look at this
06:35it's made of zambian emeralds white diamonds white gold
06:42a snip at two million pounds looks a bit tacky to me
06:48whatever you think of this watch these items are trophy assets
06:56manufacturing them is unlikely to employ thousands in a factory here in the uk
07:02so it's hard to see how this kind of spending benefits the rest of us
07:06this is a problem for britain
07:14many of the super rich we're attracting spend their money on such trophy assets
07:19private helicopters lear jets or yachts
07:22the money stays pretty much in their world but for the seriously super rich only one thing will do
07:38a premiership football club
07:40the time tony we're walking out onto the hello turf we are it's expensive surf
07:50i never thought a piece of grass would cost a million pounds
07:53qpr was bought in 2011 for 35 million pounds by this man malaysian businessman tony fernandez
08:02asia's toughest job interview begins welcome to the most challenging interview of your life he's
08:07the star of the asian apprentice the alan sugar of the far east his net worth of 650 million pounds
08:16makes him one of the richest men in both britain and malaysia it's a monumental screw up for that
08:22reason you're fired you're fired the apprentice asia premieres tonight at nine so tony you made
08:28your money from an asian airline why did you buy a british football club when you buy a learjet or a
08:35massive yacht you know it's generally for yourself the occasional parties but qpr
08:43the feelings i can't describe and life is about experiences so i'd rather do that than sit on a
08:49massive boat in the middle of the sea buying big things might be exciting for the super rich
08:57and employ some people but if trickle down was working the fact we have more super rich than ever
09:02before in britain should mean we are all getting richer but we're not instead the one percent share
09:11of wealth is rising for the 99 living standards remain at pre-crisis levels
09:19across the world people are marching this is a demonstration in boston against low pay
09:25in london what began with an occupation outside st paul's continued last year with a protest march
09:34against low pay and the growing chasm between the one percent and the rest of us
09:42you know me and my husband have worked all our life we are quite low pay but you know still we can't
09:48afford to live everybody's struggling well apart from the one percent for 10 years the average weekly
09:55income of a british family stayed the same 429 pounds in the same period the richest thousand people in
10:04britain saw their wealth more than double from 200 billion to 500 billion pounds do you think it's right
10:13the idea that their wealth would trickle down to the rest of us absolutely it doesn't trickle down
10:17when is it ever when have you ever seen that you can see it's not worked you can see it's not working is it
10:25inequality has become the theme of epic hollywood blockbusters
10:29like the hunger games in which people from outside the super rich city fight to the death for survival
10:36happy hunger games and may the odds be ever in your favor this isn't just science fiction a recent
10:48u.s government report predicted a hunger games future a world of elites and commoners
10:56and inequality is a race to the bottom that britain is winning
11:01we're the only leading economy to have grown consistently more unequal this century
11:07so how did we come to believe that attracting the super rich would benefit everyone who sold us the idea
11:13and why to understand you need to go back to the 1960s britain's wealth had been built on empire
11:24and the city of london was the hub now that was gone
11:29but britain had a plan to reinvent itself as a tax haven for the super rich
11:35we were no longer an empire we were a casino and the biggest high rollers were about to roll into town
11:42this was the era of the jet set and leading the pack with the greek shipping tycoons
11:57these ships and more add up to 6 428 602 tons whatever it is the greek shipping industry obviously has it
12:09they also had a problem if they settled here they would end up paying tax on the profits
12:16from their huge ships but a compliant british government was happy for them to exploit a loophole
12:22it meant they could avoid paying tax and it was called the non-dom rule the rule was a hangover from britain's imperial past
12:33it was designed to encourage wealthy british colonial magnates rich from the spoils of empire
12:39to come to britain and spend their money
12:44this 19th century relic now turned into a 20th century tax giveaway
12:52the non-dom rule made britain uniquely attractive to the super rich
12:55you could come here and avoid paying taxes simply through a family connection to a foreign country
13:01they couldn't believe their luck grant woods is a man who made the system work as a senior wealth
13:09advisor at coots bankers to the super rich you place your profits in offshore centers it can be managed
13:16there you can live happily in london enjoy all all the facilities of in london among the non-doms who
13:24came to britain to reinvent themselves as pillars of the establishment were check born robert maxwell
13:31originally jan hock and german tycoon tiny roland roland furok to his friends
13:40grant woods whose job was to woo these people saw tax breaks as the key tool
13:46people kept testing the limits of what was acceptable and not acceptable because there were no rules laid
13:53down by the inland revenue specifically dealing with this situation the rules were very very loose
14:00it was all very cozy the non-dom loophole remained largely unscrutinized until the 1990s
14:07when tory donor multi-millionaire as on the deer was found guilty of fraud
14:13there are a large number of people who work in britain who earn the money in britain who don't pay much
14:17tax in britain and many of these people are millionaires who are using non-resident status or
14:22non-domicile status to avoid the proper share of tax now i am going to close these loopholes
14:27but guess what nothing happened for 15 years in 2008 alistair darling finally imposed an annual
14:35charge of 30 000 pounds to someone who is a billionaire yeah how how uh how prohibitive is a 30 000
14:43um flat rate well for someone who's super wealthy it's the sort of money they'd spend on a party for one of their kids
14:55far from being a deterrent 30 000 pounds is peanuts to non-doms whose numbers are now back on the increase
15:0130 000 pounds is 3 000 pounds more than the average salary in britain you could blow a year's pay
15:11on one visit this salon oro gold in high street kensington
15:1530 000 pounds is also around the average deposit for a first-time buyer
15:29hi lena okay what do you want me to do you just want to hang your robe up and you can lay down on the
15:34couch okay and the current time scale to save for such a deposit is 22 years
15:40so what do you get for this kind of money something called a facial i'm a bit nervously what's going to
15:51happen don't worry you're in good hands so i'm just going to cleanse the skin now
16:01thing is if you are super rich you know this isn't that unusual a treatment you're totally right and
16:07usually it's not really one-off treatments they usually come for a series of treatments to get
16:13maximum results okay so usually between six and 12 treatments on a monthly basis it's a bit more
16:21expensive than an avocado all over your face yes 40p or something when it is gold the full super rich
16:28service adds gold flecked moisturizers to the gold mask with a caviar massage thrown in
16:36because you're worth it or just because you can it's just particles of gold in a gel form
16:48luxury services like oro gold thrive thanks to the arrival of so many super rich people in britain
16:58in the 1970s we were getting used to their presence for the first time
17:02but while they enjoyed tax haven britain the homegrown super rich were not amused
17:12in 1974 the new labor government promised a massive increase in welfare spending
17:17to pay for this to pay for this they increased taxes on the wealthiest to 83 percent the top earners had
17:28but their saviors were at hand in the unlikely form of two enterprising accountants roy tucker and ron plummer
17:49in the market they'd set up their own bank called rossminster its main purpose was the development of
18:00complex schemes for avoiding tax the waiting room of the accountant's office resembled an extraordinary
18:07cocktail party led zeppelin and roger moore were clients and most famously two of the beatles
18:21richard brooks was a tax inspector who has investigated rossminster's activities
18:27they were promoting uh weird and wonderful schemes with names like exempt debt scheme commodity carry
18:33scheme non-deposit interest all kinds of wacky stuff
18:41you hey attention things i didn't teach you in school one of rossminster's most unusual schemes
18:48was to use the losses from investments in british films to reduce customers tax bills
18:54one film dragged into this tangled web was the british cult classic scum
18:59a film about borstal and trouble was now looming for tucker and plumber
19:05on the 13th of july 1979 70 tax inspectors and 28 police officers raided rossminster their offices
19:15here were closed and their little party was over but an even bigger party was just about to begin
19:22rossminster showed what you could do with the tax law just how creative you could be with it and then
19:32by the by the late 80s you found the bigger councillor firms devising tax avoidance schemes and selling
19:38them very aggressively although tucker and plumber did not face criminal charges things would never be the
19:44same the men behind rossminster mark the fundamental change in attitude from now on they were saying
19:53rules are there to be broken but only if you're wealthy
20:01britain was now the tax dodge capital of the world and it's still happening
20:06last year it cost the rest of us 20 billion pounds
20:13one man has experienced how tax avoidance works for the super rich is billionaire john caldwell
20:21john nice to see you thanks for your time pleasure
20:26it's a nice little place you got here it is it's a phenomenal place
20:29you don't get this stuff at ikea do john it's probably a good job really
20:38he built up phones for you from nothing to a billionaire lifestyle of helicopters
20:42and a jacobean pile in staffordshire
20:47but this is his latest acquisition a pair of mayfair mansions reported value 250 million pounds
20:56so a good place to entertain and brilliant place to uh network with uh with the rich and famous of london
21:08john how does this compare with where you grew up
21:13oh my god a little more spacious well well my my first home
21:19first marital home when i was uh i was about 20 at the time was a 14-foot sprite musketeer caravan on
21:28my mother's lawn caldwell's not like many of the super rich he actually pays his way and as britain's
21:35biggest taxpayer he's handed over 200 million pounds in the last five years but has he ever been tempted
21:42to break the rules john have you ever sort of been approached with kind of mad schemes of all i was
21:48approached all the time with my schemes and we did take some of them up you know and i'm not proud of
21:53that how does it work you know what what's the what's the conversation that's had oh do you know
21:57some of the some of the schemes are so convoluted that i couldn't even i wouldn't even begin to
22:02necessarily understand them there's hundreds or even thousands of tax accountants often recruited from
22:09the online revenue who were tax inspectors to advise people on how to have the latest barmiest cutting
22:16edge scheme if i thought they were reasonably ethical i'd do them but they were wrong at the
22:23end of the day i believe they were wrong but this wasn't just about individuals there was a culture
22:29in which cozy relationships develop between corporations and the tax authorities with devastating
22:35consequences for the public purse there was um very much a system in which senior tax officials were
22:43rewarded in terms of uh promotions and bonuses uh not for success in tackling tax avoidance but
22:53success in fostering a partnership between the companies and the and the department so it was about
23:00how well can you create a relationship with the company rather than how much money can you actually
23:04get for the public out of that company that's right and and if you ended up in a big dispute with that
23:11company that would probably count against you in terms of your prospects um so you're actually being
23:18promoted for not doing your job essentially because your job as a public employee is to raise revenue on
23:25behalf of the public but actually they were working pretty much on behalf of the companies yeah i think many
23:31senior tax officials uh 10 years ago would have said that's how they feel yes
23:40this toxic combination of tax breaks for foreigners and massive avoidance amongst the homegrown wealthy
23:47has changed britain's role in the world we were once an imperial superpower now we're a tax haven
23:54for the super rich it's very important it's the most attractive location now i think on the planet
24:10and that's partly because the old tax havens in places like switzerland are no longer open for
24:15business for new money do you think the super rich the super wealthy were surprised by how open britain
24:22was as this new tax haven this new switzerland yeah i think that um they had assumed that they would be
24:31placing their money in you know geneva and the cayman islands and places like that these changes only
24:39happened because successive governments became convinced that trickle down was the answer it started in 1979
24:47a conservative government is elected on the assumption that britain is broken and the money of the
24:54wealthiest will help save us within weeks they slashed the top rate of tax from 83 to 60 percent the biggest
25:03giveaway to the wealthy in decades
25:05tax avoidance tax avoidance was now government policy
25:13the old world of heavy industry unions and high taxes was no longer to be trusted
25:18it had failed and should be chucked on the bonfire of history
25:30but there was serious concern about how this brave new world of lower taxes for the one percent
25:36would create inequality it dominated mrs thatcher's first ever tv interview as prime minister
25:43is the price for our economic recovery and prosperity greater inequality in this country you will get a
26:00more thriving society when people can rise to the limit of their talents and out of the wealth they
26:06create we shall all be better off so a more unequal society you think is actually better for a more
26:12opportunity society which enables the able to earn more but it does mean more inequality does it not
26:19does mean yes indeed if opportunity and talent is unequally distributed then allowing people to exercise
26:27that talent and opportunity means more inequality but it means you drag up the poor people because
26:34there are the resources to do so no one would remember the good samaritan if he'd only had good
26:40intentions he had money as well thank you very much prime minister
26:47this belief that lower taxes would stimulate growth came from the u.s with radical economists like this man
26:56arthur laffer an advisor to republican presidential candidate ronald reagan
27:01laffer believed that business not government should be trusted to create prosperity and to do this the rich
27:10should be freed from the burden of tax rich people are different than most people the rich is the one
27:16group of people where you lower tax rates you will get more revenues and every time we raise those tax
27:22rates on the rich they've paid less laffer went further he said taxing the rich would make society as a whole
27:29poorer if you tax rich people and give the money to poor people you're gonna get lots and lots of
27:36poor people and no rich people the dream is always to make the poor rich not to make the rich poor
27:45in britain chancellor after chancellor courted the super rich in the belief that they would create wealth
27:51and trickle down would be our reward
28:00but after three decades of devotion to lower taxes a new breed of economists who have looked at the
28:07evidence are convinced we've got it wrong among them one of the world's leading economists
28:14cambridge academic harjun chang trickle down economics uh you know in theory is not a stupid idea you know
28:21but the trouble is that in reality that this prediction has not been born out because in
28:26countries like the uk the us that have used these policies investment as a share of national income
28:33has fallen economic growth has fallen so where is that the pudding you know that we are promised all
28:42this that well if you give these people more money they'll create more jobs more income they haven't done
28:49anything the pursuit of trickle down in the uk means the rich have doubled their share of income since
28:58the 1980s the last decade has seen incomes for most of us stagnate further widening the gap so it's hard
29:07to see how trickle down could not be linked to inequality unless you're arthur laffer of course
29:16what critics would say about your innovation the moment at which economics is turned on its head
29:22is that essentially it's a fig leaf for politicians to cynically create tax cuts but with absolutely
29:29no economic rationale behind it whatsoever that's not true come on taxation at its most basic is raising
29:36revenue so a society can function exactly taxation is bad is to essentially say everyone for themselves
29:43there is no such thing as society and this is what the deal is of course the reason you tax is so that
29:49you can get those revenues and do good the government can do what governments should do i mean highway
29:55schools defense all these wonderful things and when they've run out of things the government should
30:00do you stop but look what's happened in britain we have one of the lowest levels of taxation for the
30:06super wealthy and our economy has at a real level uh stagnated do you think inequality has increased as a
30:14result if by inequality declining you make everyone poorer but you make the poor a little bit less
30:18poorer than you make the rich a lot poorer i don't like it i like uh i like equality when everyone is
30:25benefiting and i don't want to see everyone reaching equality by everyone going to the basement
30:31that's my view so i think looking at equality as an issue by itself is nonsense
30:35this conviction that taxes should be low is the super rich mantra but here in seattle one of them is
30:49breaking rank nick hanauer is an internet billionaire who believes we've been duped trickle-down economics is
30:59as old as human civilization we used to call it divine right now now we call it trickle-down economics
31:06it is simply the idea that i matter and you don't that that what i do is indispensable
31:15and what you do is extra it's how we keep you in line
31:20he agrees with the critics that the gross inequality we are now witnessing is the result of the wrong
31:28turn we took three decades ago the great problem we face in britain and the united states is that we
31:36are you know we have formed our economic policies uh essentially believing the trickle-down idea of
31:43reagan thatcherism right the idea that if you make rich people richer everybody's going to be better off
31:49and and you know that's just not true it's not how the economy works to use me as an example i mean
31:56i earn literally a thousand times as much per year as the as the median wage essentially in the united
32:05states plus or minus but i don't buy a thousand times as much stuff i own three or four pairs of jeans
32:14a couple of pairs of shoes you know we have a big beautiful house but i don't have a thousand houses
32:21here in seattle and so no matter how much money i have i cannot sustain a great national economy only a
32:30robust middle class can do that this is not simply about the failure of trickle-down inequality is
32:37threatening capitalism itself capitalism which is the greatest social technology ever created for
32:44creating prosperity in human societies does need some inequality just like plants do need some water
32:52but in precisely the same way that too much water kills plants by drowning them too much inequality kills
33:00capitalism by drowning the middle class the gains of the super rich have come at the expense of all of us
33:09stagnation is touching parts of society that had previously avoided pain
33:16welcome to twickenham home of the middle classes for decades who complained when shops like
33:22lidl arrived not any longer i wanted to see if they still felt secure as a class
33:29or were suffering like everyone else since 2008 i haven't enjoyed an increase in pay and yet
33:37inflation has run higher than my pay packet so effectively i'm earning less now than i was in 2008
33:43i think generally a personal wealth is going to go down and down and down i mean my parents um both had
33:49good pensions um you know they get their their winter fuel payments they get um you know a lot of a lot of
33:57freebies but i'm not expecting to have a pension i'm expecting to be much poorer when i'm older
34:04because the money isn't there if i ever need continuing health care forget it i'll be off to dignitas
34:13but inequality isn't just about the middle class it's about something more fundamental
34:19here in paris groundbreaking research is being carried out which reveals that a seismic change is
34:24taking place in the structure of society it was here at the place de la concorde in paris at the
34:35height of the french revolution that the original one percent had their heads chopped off
34:39so it's fitting that here in paris 200 years on one man an economist is changing our very understanding
34:50of what's going on by analyzing how the super rich are transforming our world
34:59the man in question is the world's most influential economist thomas piketty
35:04the middle class it's very important for for the economy because this is what also allows to you
35:11know to to develop mass consumption to develop mass investment in in construction and it has started
35:19to shrink to some extent in the in the past 20 or 30 years and and i think it would be a major threat
35:26to our democracies if it was to continue uh shrinking in the coming decades and piketty puts the blame for
35:36the shrinking middle class on the growing concentration of wealth in the hands of the rich
35:43are we going to continue in this direction of a shrinking middle class it's it's difficult to know how
35:49far this can go what is sure is that in recent years what we observe in in britain and and across
35:56countries is that very top wealth holders uh billionaires have been rising much faster
36:04than average wealth and much faster than the size of the economy you can see that if this continue
36:09for several decades and the share going to the middle class could decline if we believe that a more
36:16equal society represents progress this is under threat piketty points to one form of wealth in particular
36:25as a key to understanding his argument property for much of the 20th century britain's property market
36:39worked home ownership grew and wealth was spread across society in the process
36:45in fact it was the biggest wealth transfer from the rich to the rest of us in british history along the
36:57serried avenues of harrow's garden villages households rise and shine and settle down to the sunday morning
37:07rhythm in the 1970s when john betty made his film about metro land he was reflecting on a story of quiet triumph
37:16wealth spreading as the suburbs grew
37:21the healthy hour of harrow in the 1920s and 30s when these villas were built
37:35you paid a deposit and eventually we hope you had your own house with its garage and front garden and back
37:43garden variety created in each facade of the houses and in the coloring of the trees
37:54but there was no fairy tale ending i grew up in harrow and my parents were part of that revolution in
38:01home ownership many of my generation followed them onto the property ladder but since 2003 home ownership has stalled
38:13this is oxford but we're far away from the dreaming spires here in this city homes used to cost three
38:25times the average local salary but now an average home costs 11 times the local salary making oxford
38:33one of the least affordable places in britain
38:36oxford professor danny dawling agrees that the decline in home ownership is at the heart of the growth in inequality
38:49how important was the idea of owning property to actual relative economic equality i mean this
38:56was incredibly important we we went from a position of 90 percent of us renting and only those who were moneyed
39:03owning to a position where it was absolutely normal for the middle class to buy property my mom and dad
39:08bought a house here for four thousand pounds in the 70s um to a position where it was normal in the
39:13working class to do this so you know we had building societies set up to help you borrow money to get a
39:19friend to build you a house my house you know i can't get used to saying that have you seen my house
39:28why don't you come around to my house oh i can't wait to move in in the 70s popular sitcoms such as the
39:38likely lads reflected the reality of an upwardly mobile society
39:45but today's likely lads are more likely to live in a rented flat spending twice as much renting as they
39:52would on a mortgage in every dream home a heartache and every step i take takes me there's nowhere that
40:06this crisis is more evident than here in london they're building but it's the super rich who are
40:13buying but almost and developers are chasing their cash it's with extraordinary developments
40:22like this one hyde park showcased in this highly polished promo one hyde park represents a valuable
40:29investment in which developers sell potential buyers the dream of living a celebrity lifestyle
40:34in the center of london to the south knightsbridge one of the cheapest flat is 6.5 million pounds
40:42on average income it would take 250 years to buy it if you just went to work and slept and never had
40:52children or holidays or food thanks in part to super rich investment london prices have increased by 25
41:02percent in a year one hyde park offers legendary service a new global benchmark for luxury residential
41:10living representing a secure investment in the current economic climate some existing owners have
41:16already seen a substantial increase in capital value in excess of 80 percent own the legacy experience the
41:24exceptional few people have changed london's skyline like peter reese the former head of planning at the
41:34city of london he now blames foreign speculation for driving prices out of the reach of ordinary londoners
41:40we have a housing bubble in london that is fueled by an almost limitless wave of international capital
41:49there's no end to that supply it's constantly being generated in russia and china and in the
41:54middle east how do foreign investors view the properties they're buying in london do they see
41:59them as homes investment in the residential real estate market in london is perceived as even better
42:05than gold bricks which you have to hide in a vault and you can't see these things are out there piled
42:11up and you can actually keep an eye on them but of course inside they are just containers for this
42:17same capital that you would otherwise put in a bank vault which is i would refer why i refer to these
42:22as piles of safe deposit boxes battersea power station once a symbol of industrial power seen in this
42:38glossy ad has been redeveloped for flats of the first 866 sold 80 percent went to foreign buyers
42:47house 70 percent of all new built residential property in central london is now being bought
42:55by foreign investors so what does this mean for ordinary people for us the enclaves of the very rich
43:03are spreading over larger and larger areas and not even areas where the uber rich are living but areas
43:10where they're simply investing how far can this go how much do we give over to this desert of wealth
43:17before london ceases to work this is creating a new class of economic refugees
43:29in newham this group of single mums are being removed from their homes to make way for a new
43:35development but they refuse to go what's happening here is being called social cleansing
43:41it's obvious what's happening all these um council homes and places are being demolished and built into
43:49glass buildings that are luxury apartments that nobody in a local area can afford there's one being
43:54built just there it's a stone's throw from where we are standing right now that's stratford plaza and
43:58before that was even halfway up it was already bought off yeah we went to see our local labor mayor and
44:05he said to us if um if you can't afford to live in them you can't afford to live in them what do you
44:09want me to do about it and that's the response that we've had from our mps counsellors and um
44:16men how does that make you feel that you're being made to move out of where you live
44:20it's really upsetting because obviously we've all of our family and support networks are here has anyone
44:25shown you any support no why would they we're a fawn in the side for all daycare we're an embarrassment to
44:32them because we're proving something that they're saying is not happening after a public outcry newham
44:39council did eventually reprieve 40 out of 434 homes and apologized for the treatment of the women
44:47but the fact that they are just fighting for a place to live shows how far expectations have dropped
44:53for this generation buying a property is a ridiculous dream
44:56of 2032 britain will be a country in which the majority are renters
45:08getting hold of that key piece of wealth property will become ever more difficult
45:14and no key worker accommodation that is a shame we should not be collaborating with developers and
45:23excluding ordinary people from houses this demonstration is taking place outside a
45:30property fair in london's olympia
45:36but this fair isn't just about london cash-strapped councils from all over britain are selling off land
45:44hi there if i was an investor coming here and i said i've got 15 billion to spend
45:50we've certainly got plenty of space for 15 billion have you okay foreign investors are now circling
45:57property markets across the country it's unbelievable they're all just here flogging off basically what
46:06they are to private investors from abroad i'm from tokyo on a business trip of about a week and
46:14uh i'm in the property business 180 million 180 million okay 180 million so it's kind of a little
46:23bit of money to spend we have many investors interested in the uk properties and that's why i'm here today
46:30just to meet other people in the same industry and to find out you know what are the opportunities here
46:38but what is now becoming clear is the type of properties these new investors are after
46:43they want more and more of us to rent
46:50and that's increasingly what the market will supply
46:57but it's not just super rich foreign investors exploiting this trend properties are being swept
47:02up by a growing class of british super rich property investor the buy to let baron
47:08and this man is the biggest buy to let baron of them all kevin green
47:17is
47:28yes yes yes yes brilliant give a high five to the person next he owns 700 properties but he also gives
47:35wealth seminars on how to be a buy to let millionaire if you worry what everybody's going to say about you
47:42you ain't going to become a very successful entrepreneur does that make sense kevin's business
47:48is doing very well but he's gaining at the expense of one group in particular first-time buyers by value
47:56buy to let lending is growing faster than first-time mortgages it seems as though in britain there are two
48:01worlds being created and one is the buy to let market which is booming and then and the other half is
48:07everyone else who's trying to get on the property ladder and just simply can't afford to get on the
48:11property ladder and and they're and they're they're related because your world is is forcing everyone
48:17else from not being able to buy anything so how do you feel about that yeah i mean it's a fair comment
48:23there property if you're into it does we do it right get you in a very wealthy position generally
48:28there is a split and it's getting harder for the first-time buyer to come in whether that's because
48:33of investors is arguable we then had a payment of 31 000 pounds tax-free hands are good like that
48:42these people aren't mega landlords but everyone that succeeds could push out one more first-time buyer
48:48if everyone becomes a buy-to-let landlord and there won't be any property left for anyone else it's
48:54going to just exacerbate the problem make things even worse probably that problem has already been
49:00realized and we've reached that point our housing crisis is kevin's business opportunity as we become
49:09a nation of renters when i get up every morning i do something which is a little bit different
49:17because sometimes as an entrepreneur it's a good thing to be a little bit crazy or a little bit different
49:21isn't it what i do is i instill self-belief i go if i wasn't me i would so want to be me
49:31you know and then i feel better already once you've got that sweet taste of success that starts coming
49:39then you just want more after three one two three if i wasn't me i'd so want to be me give yourselves
49:49a round of applause property equals wealth in britain it's at the heart of ballooning inequality
49:56increasing wealth for the super rich and taking it away from us
50:00and as we struggle the party only gets better for the wealthiest in britain i'm on my way to a private
50:10event at prince harry's favorite club mahiki thrown by diamond seller to the super rich bashi
50:18how's it going bashi it's just unbelievable you know as you can see we've got about 150 people
50:22already here so it's just going better than expected yeah for bashi business is booming this is stephanie
50:39the wife of a russian multi-millionaire in london who wants to spend a lot of money on diamonds
50:46so in terms of the jewelry what what are you looking for no you would like to surprise people with
50:51something okay great let's take it out what's the most ridiculous thing that you've been asked to
50:58cover in diamonds well we had the other day someone buying a bra you know crusty with diamonds this is
51:03the only way that you can buy a bra that's worth 10 million pounds you know buying diamonds isn't simply
51:09an extravagance for the super rich like gold or watches they're an investment insulating their wealth
51:15in case the economy goes belly up again can you take one more yes please after a bit of polite horse
51:20trading they agree on a price all together it's about 54 55 so we could do it for 15. thank you very
51:27much it's a pleasure thank you thank you great doing businesses thank you
51:36for decades as we've seen government after government pursued an economic policy
51:41to attract the super rich to britain it was all based on a flawed idea that their wealth would trickle
51:47down to the rest of us it didn't economists believe it actually trickled up from us to the super rich
51:56into their giant reservoir of private wealth so you think in a way trickle down was almost a way of duping
52:02us into redistributing wealth from all of us to to the richest members of society yes i can only describe
52:09it i like that because especially in the us and the uk back in the late 1970s the top one percent used to
52:17take about 10 percent of total income on the eve of the 2008 financial crisis this rose to 23 percent
52:26there is now a growing consensus that this trickle up effect needs to be reversed
52:31uh we have indeed made rich people richer i am testament to that um but uh but clearly everyone
52:39else isn't better off and it's both immoral but also economically idiotic
52:47the super rich have the money and we need it so how do we get it off them thomas piketty has a
52:53radical solution instead of increasing income tax directly target the wealth of the super rich
52:59it would be better actually to have an annual tax on wealth this is just a matter of common sense
53:05you know this is not a matter of just left or right when you have booming property values at the
53:11top end and booming top wealth portfolio at the top end you know it would be crazy not to ask a little
53:18bit more to these people but guess who disagrees the super rich themselves
53:25i'm very very much in favor of very low taxation right the way across the board
53:34i think we don't need to be taxed anymore we are paying a lot of tax if i gave you jack my tax bill
53:40you'd probably have a heart attack so this approach of robbing the rich to pay the poor don't agree with
53:45it if somebody's done well for themselves through hard work and effort why should they be taxed through the
53:51eyeballs the super rich don't want higher taxes but low taxation does not necessarily equal higher growth
54:00since 1980 countries which have reduced tax rates for the wealthy such as britain and the u.s
54:06have not grown any quicker than denmark or sweden which kept them higher
54:12we need to change the discourse here because if a low tax was good in itself
54:21why doesn't everyone move to jamaica the highest income tax rate in jamaica is five percent
54:27if you for example look at the scandinavian countries the system there is that you tax everyone heavily
54:32but then you spend for everyone quite heavily 88 percent of danish people said that they are happy to
54:40pay what tax they are paying you know this is quite amazing yeah we in britain have a low tax culture
54:48instilled in us through 30 years of driving taxes down for the super rich but it hasn't worked
54:55the economy would be 20 percent bigger had the gap between the rich and poor not widened since the 1980s
55:04now even the rich believe things must change nobody wants to live in a society where your society is
55:10gated where you have to live behind barbed wire where you can't walk down the street
55:16you know people who are very wealthy billionaires and zillionaires of every stripe do need to wake up
55:22the price that you have to pay in higher taxes for a safe civil society where everybody is happy and
55:30doing better is very very low it's just not that big a deal but it would be a massive struggle to
55:38convince any government to seriously hammer the super rich the drive is to attract more of them here
55:44than ever before and there's a surprising reason why economist matt whitaker has been crunching the
55:52numbers on the super rich and come to a startling conclusion it turns out the super rich do have a
55:58vital role to play in our economy just not the one we were told they were playing take the activities of
56:04the super rich way particularly in finance and in business services and our gdp figures simply would not
56:09have looked as good so the super rich have played a role in our economy in terms of window dressing
56:16the economic figures you can certainly see the attraction to chances of the exchequer of attracting
56:22the super rich to the uk but clearly for the majority of people in the uk actually what the super rich have
56:28done is simply mask over the fact that economic growth has not been as strong as it as it would
56:32otherwise have been in recent years and that living standards haven't improved for for a significant
56:38number of people even in the pre-crisis years and i think a model which is based on a top one percent
56:44generating and consuming all of the growth simply isn't sustainable so if i gave you an option of
56:51were the super rich good for britain yes or no which one of those two words would you go for i'd say no
57:00when we first began to woo the super rich to britain there was no pretense that we'd benefit
57:05it but then with the collapse of manufacturing in the 80s we were told that these people would be
57:11the savior of the british economy but it was a lie we've ended up poorer it was not even us nor even
57:19really the super rich who ultimately benefited most the government allowing successive chancellors to
57:25hail economic growth when the reality for us was a decade of stagnation the super rich were a massive pr
57:33exercise and we bought it but not anymore
57:40next week we travel into the world of the global super rich how the billions that fueled their fortunes
57:47were made from our debt finance just means other people's debts so you yourself didn't bring about
57:52the crash but you created the mechanics for it to happen now that's true and as luxury booms we reveal
57:59how job insecurity has been turned into a super rich business opportunity employment as we know it
58:06traditionally has made people quite lazy in many ways but increasing inequality is going to change our
58:12world and the super rich are worried so are the pitchforks coming things keep going the way they are
58:19for sure they're going to come
58:30so
58:38you
58:40you
58:42you
58:44you
58:46You
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