WEBVTT - Crazy Rich Londoners 0:00:00.040 --> 0:00:04.560 It's Catalina. I'm cleaner. Well, this series is really nice. 0:00:04.880 --> 0:00:06.640 I know the rich because look at the houses. You 0:00:06.680 --> 0:00:12.400 can see the differences, you know. But he'll get here. 0:00:12.400 --> 0:00:18.040 It's a ridge of the Porsche area. Actually Jesus Mother Prize. 0:00:18.120 --> 0:00:20.920 That could be all art. But it's a lovely place. 0:00:21.360 --> 0:00:37.440 Lovely place, expensive but lovely. Yeah. I'm David Merritt here 0:00:37.440 --> 0:00:41.360 in the London studio. This is in the City, Bloomberg's podcast, 0:00:41.440 --> 0:00:43.519 connecting you to the stories at the heart of the 0:00:43.560 --> 0:00:48.040 City of London. With surging inflation and bad economic news 0:00:48.040 --> 0:00:50.839 dominating the news agenda, this week, we decided to take 0:00:50.840 --> 0:00:53.960 a look at the extreme wealth that lives in London. 0:00:54.640 --> 0:00:57.680 There are more billionaires here the New York, Moscow or 0:00:57.720 --> 0:01:01.840 even Hong Kong. Often that money enters without question that 0:01:01.920 --> 0:01:05.080 Britain's National Crime Agency estimates that the UK's dirty money 0:01:05.080 --> 0:01:08.720 problem runs into the hundreds of billions of pounds annually. 0:01:09.640 --> 0:01:12.760 But Russia's invasion of Ukraine is forcing the government to 0:01:12.880 --> 0:01:17.440 rethink its custom of rolling out the red carpet good morning. 0:01:17.560 --> 0:01:22.360 Russia has invaded Ukraine. At President Zelinski has accused Russia 0:01:22.440 --> 0:01:26.720 of nuclear terror. This is a threat to European Security 0:01:26.720 --> 0:01:30.320 and stability. Britain and America have again warned Russia of 0:01:30.480 --> 0:01:35.200 devastating sanctions if it invades Ukraine. Boris Johnson announced asset 0:01:35.240 --> 0:01:39.680 freezes on five Russian banks and three high net worth individuals. 0:01:40.360 --> 0:01:43.280 For our part, today, the UK is announcing the largest 0:01:43.319 --> 0:01:47.280 and most severe package of economic sanctions that Russia has 0:01:47.319 --> 0:01:53.120 ever seen. This is the first trash, the first barrage 0:01:53.200 --> 0:01:57.200 of what we are prepared to do. So just how 0:01:57.400 --> 0:02:00.880 ingrained is dirty money in London and can it be 0:02:00.920 --> 0:02:04.600 weeded out? Francine is away this week, so I asked 0:02:04.640 --> 0:02:07.840 Bloomberg Senior writer Stephanie Baker to join me in the 0:02:07.880 --> 0:02:12.480 studio along with Caroline Knowles, Professor of sociology at Goldsmith's 0:02:12.760 --> 0:02:17.680 University of London and author of Serious Money Walking Plutocratic London. 0:02:18.520 --> 0:02:20.720 In her book, Professor Knowles gives an account of her 0:02:20.760 --> 0:02:23.760 walks through the streets of London's gilded districts, from right 0:02:23.760 --> 0:02:27.120 here in the city to notting Hill, Chelsea and Richmond, 0:02:27.480 --> 0:02:30.000 and she tries to understand the lives of the super 0:02:30.120 --> 0:02:33.240 rich and how they continue to shape our city. And 0:02:33.280 --> 0:02:34.960 to do our own research, we sent one of our 0:02:35.000 --> 0:02:42.880 producers to retrace some of her steps. I love this 0:02:42.919 --> 0:02:45.720 idea of walking around these districts of London as well. 0:02:45.760 --> 0:02:48.840 And you've got a real sense from the pavement of 0:02:49.000 --> 0:02:52.880 the yawning gaps now between the haves and haves not 0:02:53.040 --> 0:02:55.760 in London, a lot of it driven by the wealth 0:02:55.760 --> 0:02:58.600 that's created within a square mild of where we're sitting 0:02:59.520 --> 0:03:03.080 right now, that yawning gap, according to your book, seems 0:03:03.080 --> 0:03:06.200 to be getting worse. Is that right? Yes? I think so. 0:03:06.360 --> 0:03:08.920 If you look at what happened after the banking crisis 0:03:09.120 --> 0:03:13.160 and after COVID, those who already have a great deal 0:03:13.200 --> 0:03:15.800 of money became a lot richer, and those who didn't 0:03:16.080 --> 0:03:19.040 visibly became poorer. And you see an expansion, and you 0:03:19.080 --> 0:03:22.639 see it around here of homeless population sitting around the streets, 0:03:23.280 --> 0:03:25.800 and you know, the number of of unhoused people in 0:03:25.840 --> 0:03:28.480 London just goes on rising. I think it's currently around 0:03:28.680 --> 0:03:32.320 ten or eleven thousand. And that seemed that that London 0:03:32.440 --> 0:03:35.120 was getting both richer and poorer at the same time. 0:03:35.360 --> 0:03:38.040 And I was interested in what were the sort of 0:03:38.200 --> 0:03:42.640 mechanisms of consolidation of the plutocracy in the city, and 0:03:43.000 --> 0:03:45.040 how could one begin to think about that, what were 0:03:45.080 --> 0:03:49.840 the infrastructures that made London a wealthy city that's also poor. 0:03:50.080 --> 0:03:53.920 That meant these two things could coexist, and the pandemic 0:03:54.680 --> 0:03:57.680 has made things worse, all right, it certainly has. I 0:03:57.720 --> 0:04:01.360 mean it's increased the wealth of the wealthier, but for 0:04:01.360 --> 0:04:04.680 for those who are you know, on moderate incomes, um, 0:04:05.000 --> 0:04:07.880 the median income in London is still only just about 0:04:07.920 --> 0:04:11.080 thirty four thousand pounds a year. For those people, life 0:04:11.080 --> 0:04:14.720 became tougher and tougher, and for those who struggled to 0:04:14.720 --> 0:04:17.599 find housing, which seems to you to be one of 0:04:17.640 --> 0:04:21.839 London's most pressing social problems if you like that. Well, 0:04:21.839 --> 0:04:24.800 while we've build plenty of houses that they're unaffordable to 0:04:24.839 --> 0:04:27.800 most of the population, that what you have was this 0:04:27.960 --> 0:04:32.040 widening gap between halbs and have not really so that London, 0:04:32.080 --> 0:04:35.039 it seems to me, is becoming an experiment in the 0:04:35.640 --> 0:04:39.359 you know, the coexistence of wealth and want. It's definitely 0:04:39.400 --> 0:04:41.080 I can bring you in here as well. You've written 0:04:41.240 --> 0:04:45.360 for many years at Bloomberg about money trails around London. 0:04:45.440 --> 0:04:48.839 What's changed in recent years in terms of how wealth 0:04:48.960 --> 0:04:53.200 is created in the city and how it's spent More broadly, Yeah, well, 0:04:53.240 --> 0:04:58.400 I arrived in London in and it has changed so 0:04:58.480 --> 0:05:02.800 much since then, from rise of Canary Wharf to the 0:05:02.800 --> 0:05:06.279 transformation of Hackney at East London that was once the 0:05:06.320 --> 0:05:09.960 affordable place to live and is now super trendy and 0:05:10.000 --> 0:05:14.160 super expensive. And then you go to places like Belgravia 0:05:14.440 --> 0:05:18.359 or Mayfair which have just gotten richer and richer, and 0:05:18.400 --> 0:05:21.560 in some cases feel a little bit hollowed out, I 0:05:21.560 --> 0:05:26.719 would say, because so many foreigners have bought property in 0:05:26.760 --> 0:05:30.080 those neighborhoods and they don't live there all the time. 0:05:30.760 --> 0:05:34.160 People which are coming it's more looks like businessmans who 0:05:34.200 --> 0:05:37.200 looks at health only for the investment, keeping empty for 0:05:37.240 --> 0:05:39.680 the long time and then selling to the other people. 0:05:40.080 --> 0:05:42.360 So there's no community, right. It's the dark, the dark 0:05:42.400 --> 0:05:45.440 windows at night, doesn't it around Mayfair exactly? So I've 0:05:45.480 --> 0:05:49.080 a londonal life and there's been a massive influx of money, 0:05:49.160 --> 0:05:51.760 foreign money. Most of the people in these houses don't 0:05:51.760 --> 0:05:55.400 actually live here anyway, so you wouldn't ever really see them. Right. 0:05:55.480 --> 0:05:57.520 It sucks the life, doesn't it. The street life is 0:05:57.560 --> 0:06:00.400 sucked out of those very wealthy area is I think 0:06:00.400 --> 0:06:03.400 notting Hill is probably a very good example where go 0:06:03.480 --> 0:06:06.680 back twenty thirty years and you had black activists, you 0:06:06.760 --> 0:06:11.719 had community activists around housing, you had a much more colorful, 0:06:11.839 --> 0:06:14.880 vibrant landscape. And now, if you think about it, those 0:06:14.880 --> 0:06:18.560 streets are fairly sterile and expensive. And every year at Carnival, 0:06:18.600 --> 0:06:20.640 of course, the people who are own those big stucco houses, 0:06:20.720 --> 0:06:22.760 what do they do? They board them up? Don't they 0:06:22.800 --> 0:06:27.320 go somewhere else? Tuscany? Yes, absolutely. As you walked around 0:06:27.960 --> 0:06:31.680 the streets, Caroline, where where else was really striking to you? 0:06:31.720 --> 0:06:34.440 Where this yawning gap between what you called the house 0:06:34.480 --> 0:06:38.280 and have nots has just been has become unsustainable. The 0:06:38.320 --> 0:06:41.160 way I think about streets is that streets tell stories too. 0:06:41.360 --> 0:06:43.880 I mean, people tell stories, but what happens on the 0:06:43.920 --> 0:06:47.159 street is also a series of stories. And the stories 0:06:47.200 --> 0:06:54.479 in places like Belgravia, are you know, enormously wealthy? Are serviced? 0:06:54.480 --> 0:06:58.040 Are you know? Even the facade you've got these uniform 0:06:58.080 --> 0:07:05.279 stucco railing porches with pillars, And if you go around 0:07:05.560 --> 0:07:08.640 Eaton Square, of course there are sort of concierge standing 0:07:08.640 --> 0:07:12.720 in uniforms in bowler hats. Although what's interesting if you 0:07:12.760 --> 0:07:17.040 think about Mayfair is the kind of standoff between hereditary 0:07:17.120 --> 0:07:24.800 wealth like the Grosvenors and Middle Eastern influence. When I 0:07:24.800 --> 0:07:28.520 mean there's a struggle between oil revenues and hereditary wealth 0:07:28.640 --> 0:07:31.760 in in Berkeley Square. Um. You know, the Duke of 0:07:31.800 --> 0:07:34.920 Westminster was the losing bid on buying that, so he's losing. 0:07:35.040 --> 0:07:38.000 Is that the aristocrats are losing? How are they can't 0:07:38.000 --> 0:07:40.240 compete with the petro dollars. No, they can't. And if 0:07:40.240 --> 0:07:43.760 you look at the the latest rich list, the people 0:07:43.800 --> 0:07:46.360 at the top of that, with one or two exceptions, 0:07:46.400 --> 0:07:57.520 are international. So one of the most concerning things about 0:07:58.560 --> 0:08:02.800 the reach of Bill and Am into London and British 0:08:02.840 --> 0:08:06.440 society is the possible impact on government and influence. And 0:08:06.520 --> 0:08:09.560 we know that the Conservative Party auction off things like 0:08:09.640 --> 0:08:15.960 dinners and access at their parties. Definitely, is the influence 0:08:15.960 --> 0:08:19.480 of Russian money, particularly something that potentially sways policy that 0:08:19.560 --> 0:08:23.960 has an outsized influence on the government's thinking. It's a 0:08:24.000 --> 0:08:27.320 really good question. I think it's hard to tell because 0:08:27.480 --> 0:08:31.320 of the lack of transparency. What we can see is 0:08:31.920 --> 0:08:36.120 Russian money flowing into political parties, in particular the Tory Party. 0:08:36.240 --> 0:08:39.520 There's a woman named Lubov Chernukin as she was born 0:08:39.520 --> 0:08:42.840 in Russia, but she is now a British citizen. Lubov 0:08:42.920 --> 0:08:46.240 Chanukin has donated large sums to the Conservatives to play 0:08:46.320 --> 0:08:49.960 tennis with David Cameron and Boris Johnson and one thirty 0:08:49.960 --> 0:08:52.600 five thousand pounds for a night out with Teresa May 0:08:52.720 --> 0:08:56.600 and members of the Cabinet, and she has donated more 0:08:56.640 --> 0:09:00.160 than two million pounds to the Conservative Party on the 0:09:00.160 --> 0:09:03.120 other side's reason. May is a loup of Junikin, who 0:09:03.160 --> 0:09:05.640 is the wife of former Russian minister. Her wealth comes 0:09:05.640 --> 0:09:09.040 from her husband, Vladimir, who has strong links to the Kremlin. 0:09:09.400 --> 0:09:13.840 She's the top female donor to the Conservative Party and 0:09:13.920 --> 0:09:18.240 it's unclear why she's done that and what she's gotten 0:09:18.320 --> 0:09:21.800 in return. Um. You know, there have been various reports 0:09:21.840 --> 0:09:25.200 looking at the source of her wealth, and you know, 0:09:25.360 --> 0:09:30.280 some leaked files showing that her husband had done business 0:09:30.440 --> 0:09:35.280 with a sanctioned Russian oligarch named Suliman Karimov. Um. So, 0:09:35.320 --> 0:09:38.240 I think there's real questions about the flow of money 0:09:38.360 --> 0:09:41.800 into politics, whether or not there are enough checks on 0:09:42.320 --> 0:09:46.000 what is the origin of that money, uh, and what 0:09:46.160 --> 0:09:49.120 is the agenda really behind it? Uh. You know, there 0:09:49.120 --> 0:09:52.200 are plenty of other examples of that. Uh. You know, 0:09:52.280 --> 0:09:56.360 for instance, you have guinea. He is the rich Russian 0:09:56.400 --> 0:10:00.400 born son of an ex KGB agent, and he of 0:10:00.440 --> 0:10:06.720 course owns the Evening Standard and has hosted various charity 0:10:06.760 --> 0:10:11.800 parties and events where Boris Johnson has attended. And he 0:10:12.400 --> 0:10:15.359 two years ago became a member of the House of Lords. 0:10:15.400 --> 0:10:19.960 And what we've learned recently is that that was against 0:10:20.000 --> 0:10:23.600 the recommendation of the security services, who had raised questions 0:10:23.640 --> 0:10:26.240 about him and becoming a member of the House of 0:10:26.280 --> 0:10:31.079 Lords because of his father's KGB past. Did Boris Johnson 0:10:31.280 --> 0:10:36.720 intervene to elevate Ev Gainey Ledvedev to Lord Leddev of 0:10:36.800 --> 0:10:40.760 Hampton and Siberia, and money, of course trump those security 0:10:40.800 --> 0:10:43.880 concerns exactly. There's also what we don't see, you know, 0:10:44.040 --> 0:10:46.880 what they do in the clubs, the kind of cognitive 0:10:46.960 --> 0:10:51.360 capture of government by wealthy foreigners and wealthy people in general, 0:10:51.600 --> 0:10:55.319 where you know that there's nothing is said, but there 0:10:55.400 --> 0:10:58.880 is a sense of being in a certain location social 0:10:58.920 --> 0:11:02.760 location to other which kind of fuels some of these things. 0:11:02.800 --> 0:11:05.920 I think, what should the government be doing. They've claim 0:11:05.960 --> 0:11:08.960 that they're going to clean up the flows of money 0:11:09.200 --> 0:11:11.600 coming into London, that London is not going to be 0:11:11.640 --> 0:11:14.560 the world's laundromat that it's sometimes has claimed to be, 0:11:15.080 --> 0:11:17.720 and the government have tried to put legislation through. But 0:11:17.800 --> 0:11:20.360 is it enough, Stephanie, I mean, are they are they 0:11:20.400 --> 0:11:23.319 actually taking this seriousty or is it very difficult for 0:11:23.360 --> 0:11:27.200 the British government to disentangle itself from the from all 0:11:27.240 --> 0:11:30.520 of this wealth. I think the Russian money is so 0:11:30.720 --> 0:11:35.080 deeply embedded in London and the UK it's going to 0:11:35.120 --> 0:11:47.880 be very, very difficult to unravel. Using London to laund 0:11:47.880 --> 0:11:50.680 a dirty Russian money has its origins in the politics 0:11:50.720 --> 0:11:53.840 of the nineties and two thousands, an era of political 0:11:53.920 --> 0:11:57.600 engagement with Vladimir Putin. You know, it all started as 0:11:57.640 --> 0:12:01.559 a result of the Golden visas offered to the world's 0:12:01.600 --> 0:12:04.400 global elite and exchange for at least two million pounds 0:12:04.400 --> 0:12:08.120 in investment into the country. Those schemes started in the 0:12:08.160 --> 0:12:11.600 mid nineties and you know they've changed over the years, 0:12:11.679 --> 0:12:15.320 but that that really ushered in. You know, hundreds of 0:12:15.320 --> 0:12:20.400 wealthy Russians who made their home here felt comfortable because 0:12:20.400 --> 0:12:23.880 they felt like their property and their wealth was protected 0:12:23.920 --> 0:12:28.080 here in a way that it wasn't in Russia, and 0:12:28.440 --> 0:12:32.400 the rules were very lax. Many Russians were allowed to 0:12:32.480 --> 0:12:34.680 come in with as little as one million, then it 0:12:34.720 --> 0:12:37.319 was up to two million. All you had to do 0:12:37.520 --> 0:12:40.040 was prove that the money was in your name for 0:12:40.080 --> 0:12:43.280 a few months, and then you could invest it in 0:12:43.360 --> 0:12:45.760 government bonds. It was such a safe bet. It was 0:12:45.800 --> 0:12:49.800 almost very safe compared to other capitles around the world, 0:12:49.800 --> 0:12:53.040 of other major cities. I mean, it was much easier 0:12:53.080 --> 0:12:54.920 to come here, was it, then say go to New York. 0:12:55.000 --> 0:12:59.760 All we really rolled out the red carpet for wealthy individuals, 0:13:00.280 --> 0:13:02.600 you know, in particular Russians. It's such a it's a 0:13:02.640 --> 0:13:06.760 short flight from London to Moscow. You know, Russians were 0:13:06.800 --> 0:13:13.600 attracted by elite British private schools, by the high quality 0:13:13.679 --> 0:13:16.440 of private healthcare. I think, you know, London has a 0:13:16.520 --> 0:13:19.560 unique ecosystem as well, built on what you say for 0:13:19.679 --> 0:13:22.160 dealing with wealth. I think in the United Kingdom a 0:13:22.280 --> 0:13:25.920 lack of political will to actually do very much about this. 0:13:26.000 --> 0:13:29.760 We already have unexplained wealth orders which we haven't really used. 0:13:30.080 --> 0:13:32.800 I mean, there is a growing apparatus that could be 0:13:32.920 --> 0:13:36.480 used to end the opacities of wealth and the offshoring 0:13:36.559 --> 0:13:40.000 and hiding of money and laundering of money. But we 0:13:40.040 --> 0:13:43.240 seem very reluctant to because of the economic impact. They're 0:13:43.240 --> 0:13:47.040 worried about frightening people off, or taking the capital and 0:13:47.559 --> 0:13:49.800 lodging it in Dubai or I mean what I guess. 0:13:49.800 --> 0:13:51.600 I mean the thing about capital it is always very 0:13:51.600 --> 0:13:53.600 mobile anyway, isn't it. So if it's going to go, 0:13:53.679 --> 0:13:56.040 it's already gone if it doesn't like what's here. So 0:13:56.120 --> 0:13:58.560 it's a very odd thing. But it seems to be 0:13:58.600 --> 0:14:01.240 that that's the kind of all is to attract foreign 0:14:01.320 --> 0:14:05.280 direct investment and other kinds of international investments that whatever 0:14:05.400 --> 0:14:17.920 social cost to the city as a whole. I wanted 0:14:17.960 --> 0:14:20.840 to talk about property because no discussion of wealth in 0:14:20.880 --> 0:14:23.720 London is completely that talking about about property, and it 0:14:23.840 --> 0:14:26.400 is it's often described as a great way to launder 0:14:26.440 --> 0:14:29.920 money as well, potentially. In June we had reports about 0:14:29.920 --> 0:14:33.480 sanctioned Russians buying property at One Hyde Park that was 0:14:33.960 --> 0:14:36.880 that building has been such a symbol, hasn't it of 0:14:37.120 --> 0:14:42.200 the um sometimes rather crazy prices of London property. I mean, Stephanie, 0:14:42.240 --> 0:14:44.080 can you tell us more about this and what it 0:14:44.120 --> 0:14:48.120 tells us about UK transparency laws? Right? So for those 0:14:48.160 --> 0:14:50.800 who don't know what One Hyde Park is, it's this 0:14:50.960 --> 0:14:56.080 luxury apartment building across from Herod's that launched about a 0:14:56.080 --> 0:15:00.440 decade ago, ten twelve years ago, and um, you the 0:15:00.520 --> 0:15:05.160 prices range from anywhere from three to I think the 0:15:05.240 --> 0:15:08.280 top penthouse sold for an excess of a hundred and 0:15:08.280 --> 0:15:12.920 thirty million pounds and I was looking at the ownership 0:15:12.960 --> 0:15:15.960 of it. Yes, there were reports and I've looked at 0:15:16.160 --> 0:15:19.280 some of the data behind this that there are about 0:15:19.400 --> 0:15:24.440 three flats there that are owned by companies or individuals 0:15:24.480 --> 0:15:28.880 linked to sanctioned Russians. They did not buy them after 0:15:29.080 --> 0:15:31.680 the sanctions came through. Those were existing owners. But I 0:15:31.720 --> 0:15:34.280 think the real story of one Hyde Park is there 0:15:34.280 --> 0:15:39.080 are about thirty flats that are owned by offshore companies 0:15:39.080 --> 0:15:42.080 where we have no idea who the ultimate beneficial owner 0:15:42.280 --> 0:15:46.680 is and who knows some of those could be Russian, uh, 0:15:46.760 --> 0:15:50.640 you know. And I think that's the real problem facing London. 0:15:50.720 --> 0:15:54.680 And of course the Economic Crime Bill that the government 0:15:54.840 --> 0:15:57.120 rushed through in the wake of the war in Ukraine 0:15:57.960 --> 0:16:01.040 is attempting to deal with that. The UK government says 0:16:01.080 --> 0:16:03.920 they are stepping up their game. They're putting forward an 0:16:03.920 --> 0:16:07.480 Economic Crime Bill two members of Parliament today that would 0:16:07.480 --> 0:16:10.760 put in place a register that would enforce the owners 0:16:10.760 --> 0:16:13.240 of these assets, largely property across the UK, to have 0:16:13.280 --> 0:16:16.720 their real identities rather than climbing behind shell companies. And 0:16:16.760 --> 0:16:19.360 it's going to go back. The legislation was fast tracked 0:16:19.360 --> 0:16:22.920 in a bid to target Russian oligarchs over the Ukraine invasion. 0:16:23.360 --> 0:16:25.000 But is it going to Is it going to work? 0:16:25.040 --> 0:16:27.560 Tom Keating is the director of the Financial Crime Security 0:16:27.560 --> 0:16:31.560 Studies at our US. I called that bill a botched job. 0:16:32.080 --> 0:16:33.680 It's not actually going to shine a light is it 0:16:33.720 --> 0:16:35.960 on who owns these places? Yeah? I mean the Economic 0:16:36.000 --> 0:16:40.160 Crime Bill is something that's been languishing for years and 0:16:40.240 --> 0:16:43.000 it was only the carnage in Ukraine that forced the 0:16:43.000 --> 0:16:47.120 government to finally act. And it does a few things. One, 0:16:47.520 --> 0:16:50.000 it toughens up the sanctions regime. It makes it easier 0:16:50.040 --> 0:16:54.040 to impose penalties for sanctions violations. It makes it easier 0:16:54.120 --> 0:16:56.880 to go after unexplained wealth orders. This is, you know, 0:16:57.600 --> 0:17:01.720 court efforts to target individuals, make them prove the source 0:17:01.760 --> 0:17:04.240 of their wealth, that they actually have clean money to 0:17:04.280 --> 0:17:07.320 buy and hold the assets that they have here. But 0:17:07.359 --> 0:17:11.000 the real thing that it does is create this register 0:17:11.280 --> 0:17:16.320 of overseas companies that own property in the UK. But 0:17:16.560 --> 0:17:20.919 it's full of loopholes. You know, you can create a 0:17:20.920 --> 0:17:25.679 company still based in someplace like the British Virgin Islands 0:17:25.760 --> 0:17:30.120 and find a few relatives or friends to hold less 0:17:30.160 --> 0:17:34.400 than twenty which is the threshold at which beneficial ownership 0:17:34.480 --> 0:17:38.080 must be disclosed, and you still can shield who the 0:17:38.200 --> 0:17:41.520 ultimate identity, who the ultimate owner is. And I'm just 0:17:41.680 --> 0:17:43.160 I mean, this comes to the point I really want 0:17:43.160 --> 0:17:46.320 to go into next, which is this question of secrecy. 0:17:46.560 --> 0:17:53.280 There is this absolute paranoia of of transparency and it's remarkable. 0:17:53.320 --> 0:17:55.920 And you have to give everyone names, sort of stage 0:17:56.000 --> 0:17:59.040 names in your book because they won't be referred to 0:17:59.480 --> 0:18:02.919 by their means. Why do wealth and secrecy go together 0:18:02.960 --> 0:18:05.760 like this? It's curious, isn't it. I mean, they wouldn't 0:18:05.760 --> 0:18:07.520 have spoken to me if they've been on the record, 0:18:07.560 --> 0:18:09.359 if I was using their real names. I mean, that 0:18:09.480 --> 0:18:12.320 just wasn't going to happen. They're extremely coy about how 0:18:12.440 --> 0:18:15.720 much money they've got, how they've got it, often obscuring 0:18:15.760 --> 0:18:19.000 the origins of their wealth with philanthropy and art collections 0:18:19.000 --> 0:18:21.960 and other things. You know, I coined this term that 0:18:22.040 --> 0:18:25.119 I borrowed, which is that the wealth is in a 0:18:25.119 --> 0:18:28.280 way of nervous condition. They I think the wealthy know 0:18:28.960 --> 0:18:31.960 that what they do the sources of their wealth, that 0:18:32.359 --> 0:18:34.440 they live in such a different way from the rest 0:18:34.480 --> 0:18:38.000 of Londoners that actually that's indefensible, and I think that's 0:18:38.040 --> 0:18:40.359 what they're covering up. It's not they do anything so 0:18:40.560 --> 0:18:43.080 very there's a sense of conscience there. Do you think 0:18:43.119 --> 0:18:45.720 that actually really there is a whole mix. But I 0:18:45.760 --> 0:18:48.040 think generally they don't want to step over the homeless 0:18:48.080 --> 0:18:50.480 on the way to the opera. They probably wouldn't mind 0:18:50.960 --> 0:18:54.760 investing and paying a little more tax to to even 0:18:54.840 --> 0:18:58.000 up the playing field a little bit. I mean, Stephaniely, 0:18:58.200 --> 0:19:01.399 so we've got this transparency bill, you can circumvent it, 0:19:01.520 --> 0:19:04.240 as you've described, But how is London stocking up on 0:19:04.280 --> 0:19:07.720 this with other big financial centers around the world. You know, 0:19:07.760 --> 0:19:11.359 in America, is it easier to consider your wealth or 0:19:11.640 --> 0:19:13.760 the motive is still the same, or what's the difference 0:19:13.800 --> 0:19:17.280 in London. It's a real mixed picture. I mean the 0:19:17.359 --> 0:19:21.240 US has taken similar steps to try to um, you know, 0:19:21.720 --> 0:19:26.399 crackdown on money laundering through real estate, but ultimately there 0:19:26.440 --> 0:19:29.560 are certain states in the United in the United States 0:19:29.600 --> 0:19:34.040 that are bigger tax havens than the likes of Cayman 0:19:34.440 --> 0:19:38.160 or b v I. And so there are real problems there, 0:19:38.240 --> 0:19:44.000 I mean, the lack of transparency and states like Montana, Nevada. 0:19:44.080 --> 0:19:47.240 I mean, the list goes on is enormous, and you know, 0:19:47.520 --> 0:19:52.199 it has led to, you know, accusations of hypocrisy that 0:19:52.280 --> 0:19:56.400 the US preaches, you know what it doesn't practice. Um So, 0:19:56.520 --> 0:19:59.439 I you know, I think that the UK is taking 0:19:59.480 --> 0:20:03.920 the step the right direction, but ultimately, for instance, with 0:20:04.000 --> 0:20:07.080 the Overseas Register, it doesn't matter if you do you're 0:20:07.119 --> 0:20:09.439 required to disclose, if there's no if there are no 0:20:09.560 --> 0:20:13.040 checks on the information that you provide, and there's no 0:20:13.520 --> 0:20:19.879 budget for company's house to actually monitor and audit the 0:20:19.920 --> 0:20:22.560 information that is submitted there. And I think the real 0:20:22.680 --> 0:20:27.760 change won't happen until company's house is empowered and financed properly. 0:20:28.160 --> 0:20:30.880 I think it is a resource issue, isn't it very much? 0:20:30.920 --> 0:20:33.280 Because the British state in many ways is so much 0:20:33.320 --> 0:20:35.840 poorer than the well see who can afford the best 0:20:35.920 --> 0:20:38.800 lawyers and so on to avoid tax So I think, 0:20:39.400 --> 0:20:41.080 you know, I think it's a question of not just 0:20:41.200 --> 0:20:44.880 passing legislation, but as you say, is resourcing it properly 0:20:44.920 --> 0:20:59.560 and making it enforcible and giving it some teeth. What 0:20:59.680 --> 0:21:03.560 sort of change can we realistically expect to try to 0:21:04.119 --> 0:21:07.320 make this a more equal city. You could do something 0:21:07.400 --> 0:21:11.360 about shifting resources from the very rich into home building 0:21:12.080 --> 0:21:14.879 for people on moderate and pour incomes in London of 0:21:14.920 --> 0:21:18.040 solving the housing crisis, it should not be beyond a 0:21:18.119 --> 0:21:20.680 wealthy city or a city with this much money going 0:21:20.760 --> 0:21:23.680 through it to actually solve the problem of homelessness. It 0:21:23.680 --> 0:21:26.720 wouldn't be that expensive, and actually it would be possible, 0:21:26.760 --> 0:21:29.720 but it you know, you need to empower local authorities 0:21:29.760 --> 0:21:32.840 to have and spend money. They don't often don't have 0:21:32.960 --> 0:21:37.040 the right resources, and so I think some small redistributions 0:21:37.200 --> 0:21:40.560 would be in order to make a start on that 0:21:40.640 --> 0:21:43.600 kind of gap which exists, you know, kind of city 0:21:43.640 --> 0:21:46.560 where so much the GDP comes from finance and comes 0:21:46.560 --> 0:21:48.920 from the square mile in Canary Orphans and the hedge 0:21:48.960 --> 0:21:51.760 funds in Mayfair. Is there a model in which that 0:21:51.800 --> 0:21:55.320 can coexist with a more equal society as well? It's difficult, 0:21:55.320 --> 0:21:58.200 isn't it. And you know, the whole question of counting 0:21:58.240 --> 0:22:02.080 prosperity through GDP is ablematic, isn't it. So I'm not 0:22:02.160 --> 0:22:05.800 quite sure how one would deal with that, but I 0:22:05.840 --> 0:22:09.879 mean certainly making a start on tax taxation and taxing 0:22:09.960 --> 0:22:15.240 wealth and raising council taxes so that people who live 0:22:15.240 --> 0:22:18.560 in these luxury properties pay multiples of what the rest 0:22:18.680 --> 0:22:20.680 us pay would be a would be a start. I 0:22:20.720 --> 0:22:23.000 think you could begin with that. I'm not saying that 0:22:23.200 --> 0:22:25.600 you can change the entire system, but if you move 0:22:25.640 --> 0:22:27.920 a few of the pieces on the board, the mosaic 0:22:27.920 --> 0:22:30.240 would look a little bit different, and it might just 0:22:30.400 --> 0:22:33.280 move slightly in the right direction. Karen Nols, thank you 0:22:33.359 --> 0:22:36.520 so much for talking to in the City, and Stephanie Baker, 0:22:36.560 --> 0:22:46.960 thank you so much to thank you. Thank you. I'm 0:22:47.040 --> 0:22:50.000 David Merritt, and that's it for this week's episode in 0:22:50.080 --> 0:22:53.000 the City. We will be back next week and in 0:22:53.000 --> 0:22:54.879 the meantime. If you like the show, please rate it 0:22:54.960 --> 0:22:57.480 and check out the Bloomberg UK website for more news 0:22:57.560 --> 0:23:02.719 and views. Special thanks our guests Stephanie Baker and Caroline Knowls. 0:23:03.119 --> 0:23:07.119 This episode was produced by Summersadi and Elina Ganatra. The 0:23:07.200 --> 0:23:09.640 head of Limbo Podcasts is Francesco Levi.