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[00:01]
Gary Stevenson
I think we just fundamentally underestimate how important the wealth distribution is. So I get my first big bonus beginning of 2010.
[00:07]
Robert Peston
And how much was that?
[00:08]
Gary Stevenson
It was 395,000 pounds. March 2020, the very beginning of COVID There'll be an inflation crisis, a cost of living crisis. The gold price will go up massively, stock prices will go up massively, house prices will go up massively. Government austerity, huge increase in poverty in March 2020. I said that and we could have prevented that.
[00:24]
Steph McGovern
So this isn't just about taking more money off the rich.
[00:27]
Gary Stevenson
Well, I want to be clear, I'm not trying to take money off the rich.
[00:29]
Steph McGovern
Well, you are because you want to do well. Tax. No, go on, go wrong, go on.
[00:33]
Gary Stevenson
We are existing in an economic state of rapid increase in wealth inequality. If you're making 5% on a billion pounds, you're making 50 million pounds a year. So one billionaire is making about a million pounds, maybe 2 or 3 million pounds a week, passive income.
[00:46]
Robert Peston
I'm just going to point out. Yeah, right. That what you haven't done.
[00:50]
Gary Stevenson
Yeah.
[00:51]
Robert Peston
Is address the point that I was making earlier, which is it's the taxpayer who picked up the bill.
[00:56]
Steph McGovern
Support for this episode comes from Octopus Energy and the founder and CEO Greg Jackson is with us now. So, Greg, talk to me about Kraken. What is it and why is it spinning off from Octopus Energy?
[01:09]
Robert Peston
When we built Octopus, we also built a software platform like an operating system like iOS or Android on your phone to enable energy companies, utilities, starting with Octopus, but frankly anyone in the world to be much more efficient, to use vast amounts of data and to be able to become more innovative and to serve their customers better. That piece of software is Kraken. We've used it not only for Octopus, but companies in the UK like EDF and E On have used it to improve their business too. But you know what? It turns out, over time companies realized that they were licensing from a competitor and so we've had to spin it off so it can reach its full potential.
[01:52]
Steph McGovern
Yeah, makes sense. Craig, thank you. Right, we're going to go to the episode. This episode is brought to you by Google Chrome.
[01:59]
Gary Stevenson
You think you know a browser, but
[02:01]
Steph McGovern
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[02:15]
Gary Stevenson
There's no place like Chrome.
[02:17]
Steph McGovern
Check responses, setup required compatibility and availability. Various 18
[02:23]
Robert Peston
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[02:24]
Steph McGovern
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[03:02]
Robert Peston
Hello and welcome to the Rest Is Money with me, Robert Peston.
[03:06]
Steph McGovern
And me, Steph McGovern. And with us today, Gary Stevenson, who is an equality economist. He's here to tell us why taxing millionaires is the way to make things first bearer. But we've got so much to talk to Gary about that we're going to split this into two episodes. As I'm sure a lot of you know, Gary's a working class kid who became a millionaire in his 20s by being one of the best traders in the city betting against the economy. So we're going to talk to him about why he kept betting on the economy going wrong and how this relates to his obsession now with wealth inequality. So here's part one with Gary Stevenson. Gary, thanks for joining us. So you're a rich lad. You've done well for yourself. You know, you made quite a bit of money early on in your life in your 20s and kind of defied the odds to do that. But you think rich people should be paying more tax, don't you? You've kind of got a problem with being rich, haven't you?
[04:00]
Gary Stevenson
It's better than being poor. It's hard to be poor. Yes. I grew up, I wouldn't say very poor, but like pretty poor. You know, small little terraced house.
[04:09]
Robert Peston
Council house, was it, or.
[04:10]
Gary Stevenson
No, it was the council house. Yeah. Just, just a little terrace house on a little terrace street next to the railway, you know, sharing a bedroom with my brother in London, East London, always sort of dreamed of being rich and making money. And obviously all the stories are there in my book. People probably know it by now. Got into London School of Economics. I won a competition, got a job in the city. In 2011 when I was just 24, I was Citibank's number one trader in the world. Got paid like millions of dollars in one year. So I made a lot of money very quickly. And, well, I kind of had definitely a burnout. Maybe you could stretch it and call it a breakdown. I mean, my Situation is quite specific because the exact way that I made my money was I was betting on, you know, like, the economy is going to collapse and living standards will collapse. So I'm sure that played into it. But look, I don't want to, you know, obviously, of course money doesn't make you happy. It's easy for me to say that now, somebody with money, but I don't want to be disrespectful for what I have. And I do understand the difficulties of poverty. I mean, that's the whole reason I do the work that I do.
[05:13]
Steph McGovern
Yeah. And when you say you went to hello scene stuff, did you. You went to grammar school, did you?
[05:18]
Gary Stevenson
Yeah, got into a grammar school. Ilford County High School in Barkingside, East London. Got expelled when I was in year 11 for selling a small amount of cannabis, which I don't condone.
[05:29]
Steph McGovern
Before you did your GCSes then?
[05:31]
Gary Stevenson
Yes, I got expelled just the beginning of year 11, which is GCSE year. Yeah. And then I had. I basically didn't have a school for pretty much the whole of year 11. I had to, like, study at home. Yeah. I didn't even have a desk at home, so I had a little. Little wooden board I'd put on the floor, lie on the floor and do my own work. But a stars and three A's, though. Not bad for wooden board.
[05:48]
Steph McGovern
Did you do that without any, like, how did you do the exams? Where did you sit?
[05:53]
Gary Stevenson
So basically the school, rather than expelling me, they basically like suspended me forever because the last year, so they, like, it suspended me and extended my study leave so I couldn't go back. So they would, they would email my parents, like, these are their homeworks and I would get them.
[06:05]
Steph McGovern
They must have known you were going to get good grades, though, so that's probably why they wanted you.
[06:08]
Gary Stevenson
Maybe. I don't know. I don't know if that's why they kept me in. But yeah, that was. I mean, it's crazy because I just turned 16 when I expelled. God, it's a lifetime ago, but it was a lot. But in. In a weird way, it was good for me. In. In a weird way because I was that annoying kid sitting in the back of the class, like, class clown. Not really studying, not really doing my homework. But then obviously being expelled, I had to get my head down. So it was kind of the first time in my life that I was like, oh, I'm gonna have to work for this.
[06:33]
Robert Peston
You learned how to apply yourself?
[06:35]
Gary Stevenson
Yeah. And also just to work and study. Independently, because previously I would just go into school and you know, not to like brag too much. Like it was a bit easy for me and I would just. You'd win the classes and you'd get the grades. Because if you, you know, if I didn't have school to go to, I did have to study myself that year.
[06:50]
Steph McGovern
Yeah. So obviously fast forward, you've, you know, as we said, become very successful.
[06:55]
Gary Stevenson
Yeah.
[06:56]
Steph McGovern
And very rich. But just tell us what the problem you have with the fact that people are rich because it comes across as that.
[07:03]
Gary Stevenson
Yeah, listen, I've got no problem with people getting rich. I've got no problem with people making money. My job from 2008 until 2014 was, you know, to summarize, a little bit, basically betting on the strength of the economy, obviously 2008 financial crisis. And what people don't know about the financial crisis is at the time, it was actually really similar to Covid, which is during the crisis itself. Obviously things are really bad, but there was this really strong narrative that things will get better really quickly because, you know, zero interest rates and quantitative easing and government deficits and all this kind of stuff. But obviously we now know that things never really got better after 2008. You know, we had a really weak economy for a long time. I studied maths and economics at London School of Economics and I became fascinated in this sort of early 2010s period of like, why are we like consistently wrong in our predictions about the economy? And it was fascinating to me and I wanted to understand that. And I thought a lot about it and I've studied it since basically, I think from my work in academia and economics and from in finance and economics, I think we just fundamentally underestimate how important the wealth distribution is. And I think if wealth distribution, if wealth inequality grows very quickly, which it has, especially since COVID but even before, I just think that causes really rapid increases in poverty and I don't think that's going to reverse.
[08:21]
Robert Peston
So we're going to come on to that in more detail later. What were the instruments that you were betting on as a trade? And just to be clear, were you. You were actually taking positions for the bank, were you?
[08:36]
Gary Stevenson
So I was a short term interest rates trader.
[08:38]
Robert Peston
Yeah.
[08:40]
Gary Stevenson
And what my job kind of officially was was market making foreign exchange swaps, which might, I don't know if that would mean something to anyone. Foreign exchange swaps are basically like, they're short term loans. It's like it's the most common instrument that like big corporations or pension funds will use for like very short term funding, like, like rolling daily funding. So they, they end up being driven by the base rate, the central bank base rate. And it's a funny one because the job officially is market making. So big corporation, whatever, Samsung wants to do a euro dollar FX swap, basically do a loan and you do do a lot of that. And especially in 2011 I was doing an enormous amount of this providing funding for corporations.
[09:23]
Robert Peston
And this is overnight money, is it?
[09:25]
Gary Stevenson
So anything up to two years, Anything up to two years we could go a little bit longer. But it's a really heavy focus on base rates. So what is the central bank base rate going to be in 12 months? What is it going to be in 18 months? You might go as long as 36 months, two years.
[09:41]
Robert Peston
And when you talk about the bet that you made, you provided the credit on the basis that the cost of money, the official bank rate was going to remain effectively close to zero for longer.
[09:55]
Gary Stevenson
Yeah, exactly. So post 2008 we obviously, we now know that rates stayed 0 until 2022 I think. But during that period after 2008, basically for the whole period from 2008 until right up into Covid markets pretty much consistently thought that rates were going to renormalize in the next 12 to 18 months. So obviously historically normal levels of rates are sort of more 4 or 5%, which meant that if you wanted to borrow money in a year's time, if you wanted to like secure your interest rate on a loan maturing next year, you would be having to pay maybe 3% even though the rate now is 0%. And starting in 2011, I just started to consistently say, well I'll lend at 3% and then I'll just wait because I, I became quite confident that the base rate would stay zero. So you're lending at 3%, you wait a year, the base rate zero and you make your 3%.
[10:47]
Steph McGovern
Well, what was making you think that that was going to happen? That it was going to sit?
[10:51]
Gary Stevenson
Yeah, so I sat. You know, I started June, June 2008, very young. 21. You watch the crisis happen. You know, I've studied economics. Yeah, everybody thinks interest monetary policy is powerful. We, you, we cut rates to zero. Obviously we now saw that happen for a long time. At the time it was, you know, unprecedented outside of Japan, you know, massive move, you know, quantitative easing, massive government deficits and oh, like everybody else studied economics, you're told that's going to have a massive impact. Yeah, and it would have a massive impact. So everybody thought 2009 massive recovery. It's really similar to Covid, by the way. People kept saying, we're going to have a massive recovery. Then 2009 comes recovery, doesn't happen. 2010, there's going to be massive recovery. 2010 comes recovery, doesn't happen. 2011, there's going to be massive recovery. So by the beginning of 2011, you know, I've been doing this job full time for nearly three years and all I've seen is just consistently people being wrong and wrong and wrong and wrong. And, you know, I can't lie. Like, you sit there and you work with these traders. I'm not going to say all traders are idiots, because they're not. They weren't all the smartest guys, if I'm totally honest. And it was fascinating to me because, you know, you study Atlanta School Economics, big prestigious economics university. You go and you work with guys who are getting paid millions of pounds a year and you think, these are the guys, and then you realize, like, they're just wrong every year. And to me, honestly, it was incredibly exciting. It was incredibly exciting to realise, like, wow, like, we're wrong on this massive thing. It's huge. This is the direction of the global economy.
[12:12]
Robert Peston
Now, looking back on it, right, so you're a young person, you're suddenly finding yourself, you know, to use that expression, filthy rich.
[12:20]
Gary Stevenson
Right.
[12:21]
Robert Peston
You're also surrounded by a lot of testosterone. Quite a lot of people who you've just said you do respect some of them, but quite a lot of them you didn't really respect what was going on. You talk about it as burnout. Looking back on it, what happened to. Because you had to take quite a lot of time off work, didn't you?
[12:37]
Gary Stevenson
Yeah, I think. I think if I look back at one moment, I always remember my first bonus. So I started working in mid-2008, so my first full year was 2009. So I get my first big bonus beginning of 2010.
[12:49]
Robert Peston
And how much was that?
[12:50]
Gary Stevenson
It was £395,000, which, presumably, given your
[12:54]
Robert Peston
background, I mean, that's a lot.
[12:55]
Gary Stevenson
That's a lot of money for anybody. I've been led to believe that it was going to be about 100, 120,000 pounds.
[13:01]
Robert Peston
Right.
[13:01]
Gary Stevenson
And then I remember, like, going into that, you got to remember this is. I mean, that's a lot of money. Even now. This is 15 years ago. Yeah. Beginning 2010, I'm 23 years old. You know, I come from a very poor background and I remember being in that meeting room and having my boss, massive lad, Sitting there, piece of paper on the table and I'm looking for 100, 120. Yeah. And it's not there. And the top number is 395. And I'm pointing at the number and saying, is it that? And he suggests that. And then I literally remember like it was yesterday. I remember saying, wow, yeah, that's a lot of money. And what did you do with that money? Well, the truth is nothing really. I just invested it. But I remember the next thing I remember is I'm on the desk.
[13:39]
Robert Peston
But. So you weren't one of those traders who then went straight down, you know, the club.
[13:46]
Gary Stevenson
I wouldn't know what to 100, 120,000 pounds. You know, I might have.
[13:50]
Robert Peston
But the burnout wasn't, it wasn't related to like lifestyle stuff, which so many traders would do.
[13:54]
Gary Stevenson
You know, don't believe the rumors. No, I was never into, I was never into the parties and the various substance abuses.
[14:01]
Robert Peston
That's what I'm asking.
[14:01]
Gary Stevenson
Yeah. No, for me, what it was this. When this money came in, I, I was in shock. And I remember, I remember being on the desk and I feel like I was going to cry. I remember this. And then I was really lucky. I worked with another guy who was, he was a bit older, but he was from a working class background. In the book he's called Billy from. He's a Scouser and he could see. And he just said, look, go and sit down and like take his. There's a little patch of grass in the middle of Canary Wharf. I don't know if you've probably been there. And the next thing I remember, I'm on the little patch of grass and it's a funny little patch of grass because there's like three skyscrapers on three sides and there's a little, little bit of light coming through. And in my shock, I hadn't taken my coat, I hadn't taken my. And it's obviously bonus days in January, sitting shivering on this little patch of grass and you just like, you know, when I was at university, I used to get for lunch every day, go to Tesco and buy two scotch eggs for 75p. That's what I had for lunch every day. And then suddenly one day somebody just gives you 395, 000 pounds and it's overwhelming. Yeah, you just think all those coach eggs. But you know, I thought about my dad, you know, you know, my dad, you know, we grew up in this little tiny house and my dad worked for the post office and you know, he would wake up early and the train used to take into Central, would go past the back of my house before me and my brother were awake. And I remember my mum would come and wake us up in the morning to see if we could just see him waving as he went past on the train. And. And then he comes back late in know he's not. I'm sure your memories of your parents are probably similar, right? You know, you have these. You just think how hard he worked.
[15:30]
Steph McGovern
Yeah.
[15:30]
Gary Stevenson
For 20 grand a year. And I grew up in a very, like, Pakistani immigrant area with a lot of, you know, poor families with the dad sleeping on the sofa because there's not enough bedrooms. And you just think, like. And then suddenly somebody gives you this395,000 pounds. And I was thinking that. But then the next thing you think is, well, if I'm 23 and I got 395, 000 pounds, what did, what did Reaper get? What did. What did. That guy over there with the pink shirt. And then suddenly you're like, well, why. Why are they allowed to get paid millions and not us? You know, and then. And the truth is, it became an obsession. And, you know, the way I describe it in the book was, so how
[16:03]
Robert Peston
many years were you totally immersed in the sort of. So trading, you know, trading.
[16:08]
Gary Stevenson
That would have been the beginning of 2010. 2010. I was right into it. 2011. I was completely obsessed.
[16:15]
Robert Peston
Yeah.
[16:15]
Gary Stevenson
And then 2011 was when I was the top trader in the bank.
[16:17]
Robert Peston
So it was an addiction, really.
[16:19]
Gary Stevenson
An addiction, an obsession. Yeah. Yeah. I don't. Yeah, I think it's just I'm the kind of guy that I have to be careful about computer games. If you give me a good computer game, I'll wake up and it'll be like, yeah, completed, you know, I mean, like. Like, I just want to figure out games and I want to win and, you know, and this was. Not only was it a game, it was a game that could make me millions of pounds by understanding the world, by. By competing with the best people in the world. So, yeah, it was, you know, in the end I bought a massive. I bought like, not a massive. I bought a nice apartment, ripped all the furniture out, didn't even furnish it, and all I was doing was waking up. Trading. Yeah, it was. It was an obsession.
[16:54]
Steph McGovern
Did you feel at the start guilty then for, like, earning that much money when you talk about your dad? Because I have this with my mom who works in the NHS for 40 years and, you know, and you think, God, when you compare how hard we've had to work compared to our parents, it's incredibly. It's miles apart. So did you. Do you think this obsession came from guilt as well?
[17:15]
Gary Stevenson
Yeah, me. Me personally, I think no.
[17:19]
Steph McGovern
Right.
[17:19]
Gary Stevenson
If you want, you can call my therapist up and ask him. You know, it's a funny one because obviously, more recently I wrote this book and the book was really successful. And I personally think the book is amazing. Documentary is very good as well. But, like, in a weird way, I felt more guilt when I wrote. More guilty when I wrote the book. Because the thing is, I was winning math competitions when I was a teenager and I was lying on the floor, you know, studying to get into lse. And I got into LSE and I was the best at LSE and I had the best grades at lse. So, like, that felt like I've worked for it and I've deserved it, but when I wrote the book, know. So my sister works in theater and in writing and I see how hard she works. You know, I had a friend of mine, he's actually. He's a character in the book, Harry Sandby, his mum, I remember, she, she. All she wanted was get a book published and, like, for me to just write a book with no background in writing and have the book be, you know, the number one book in the country that felt a little bit like, God, what have I done to deserve this? But the truth is, like, I don't know if this says a lot about me. Like, I thought I was the best when I was a kid. I thought. I thought nobody deserves it more than me.
[18:17]
Steph McGovern
Yeah.
[18:18]
Gary Stevenson
But, you know, I think when you add in that element, I was literally betting on the collapse of society and the collapse of living standards.
[18:24]
Robert Peston
We are talking about the financial economy now, and which is where you work.
[18:29]
Gary Stevenson
Right.
[18:30]
Robert Peston
So what is your view about the sheer volume of financial transactions that are broadly unrelated to the real economy? Because there are quite a lot of people who say the financialization of the global economy is. Is apartment Anything else? One of the sources of the kind of wealth inequality that you rail again. So, you know, in other words, looking back on what you did for a living, would you rather those jobs didn't exist?
[19:01]
Gary Stevenson
Listen, I would rather we lived in a world where our best and brightest young economists were. Had opportunities to work in jobs where they protected our country's economy.
[19:14]
Robert Peston
Because looking back on what you did for a living, as it were.
[19:19]
Gary Stevenson
Yeah.
[19:20]
Robert Peston
Was it in. I mean, it was obviously in, you know, your benefit because you got these Bonuses, the bank loved you because you were generating profit for them. But if you look at its impact on other people's lives, what do you think?
[19:34]
Gary Stevenson
Well, you know, if I'm totally honest, a big part of me doesn't really like the demonization of the bankers and the finance workers.
[19:40]
Robert Peston
I'm not demonizing, I'm asking you a question about whether essentially. Yeah, you know that explosion of so the financial economy in the UK it's about 10, 11% of all our GDP. And there is some of that banking investment that is actually about helping businesses that employ lots of people raise capital at an effective, at an efficient interest rate. But there is quite a lot which is rent extraction. It is simply trading that allows smart people effectively to make a large amount of money from betting. Now there are some people who say that means the market is super efficient, but actually I don't think it is. I think a lot of the time it is simply and we saw this in the run up to the financial crisis, a lot of what was going on was hiding risk so that a smart people could get the money out before the whole thing collapsed.
[20:46]
Gary Stevenson
Yeah, this is an interesting one to me and I've got a lot of mixed emotions on it because you know, I've been basically doing economics as my full time job for like more than 20 years now in, in variety of ways. Right. So obviously I've been lse, I've done a two year masters at Oxford, I was in the City trading for a long time. Now I've got a YouTube economics channel, I talk to politicians, I sort of float around the think tank world, I've been in the media. So really I don't think you'll see many people who've had a broader view of the different roles and the different economic spaces in our society than me. And if I'm totally honest with you, I miss the trading floor because you know, I've been away from the trading floor for when I get 2014, so nearly 12 years now and in the last six years obviously I've been very outspoken politically saying listen, if you don't do something about inequality, society is going to collapse, living standards will collapse, there'll be a big increase in poverty and you know, a lot of people disagree with me. I'm sure you'll go on to that. And the, and back when I worked on the trading floor a lot of people disagreed with me as well. And when I was on the trading floor and a lot of people disagreed with me and it was a lot of richer posher People. Because those are the people in that space. I loved it. I loved it.
[21:57]
Steph McGovern
Because you were underestimated, I bet.
[21:59]
Gary Stevenson
Listen, if we're on the trading floor right now and I say to you, inequality is going to grow, it's going to ruin the economy, it's going to ruin living standards, and you say, no, Gary, you're wrong. I have the right to say, okay, everybody, wallet's out table now, and I'm taking it home. I'm taking your money home. I'm taking your money home. And at the end of the year, everybody's going to turn around and say, who got it right? Gary got it right. You know, now I've been doing the job that I do now for six years, and, you know, the first thing I ever did was I wrote an article for Open Democracy and the Guardian. March 2020, mark the very beginning of COVID saying there'll be an inflation crisis, a cost of living crisis, the gold price will go up massively, stock prices will go up massively, house prices will go up massively, government austerity, huge increase in poverty. In March 2020, I said that. And we could have prevented that. And we are still. And now I'm still. My life is still to be constantly called an idiot by posh people, and I cannot get them to get their wallets out. And it's like, at least. At least in the finance, I can make these posh boys pay me. And at the end of the year, they have to recognize. They have to recognize that I was right. And listen, yeah, I worked with a lot of posh boys, right? And at the beginning, when I started working with them, and I said, oh, the problem is inequality. The economy is going to collapse. They laughed in my face and they messaged me every week, what's going to happen, Gary? I went to Japan to talk to my Japanese colleague and said, listen, I've written this book. You're in it. Just wanted to let you know I've changed your name and stuff. And he said to me, okay, but Gary, what's going to happen to interest rates? That's all these guys want from hand. I miss that space where somebody can be respected regardless of their class background, simply for consistently being demonstrably right.
[23:30]
Robert Peston
Gary, this has been great fun, but we just need to take a quick break.
[23:38]
Steph McGovern
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[24:37]
Robert Peston
I'm just going to point out that what you haven't done is address the point that I was making earlier, which is a lot of what happens in the City of London is about hiding risk, extracting, as I say, rent or profit from what is essentially a con in many cases. And then as we saw in 2007, eight, it's the taxpayer who picked up the bill.
[25:03]
Gary Stevenson
Yeah, listen, look, I'm not here to advocate for the fight. If you read my book, you know, and I think it's well known, like I'm not the biggest fan of the finance industry. I think it's a phenomenal waste of talent in many, many cases and I think a lot of dodgy stuff goes on and I've seen a lot of dodgy stuff go on and I wish, I wish that, you know, so many of the smartest economic brains, I was at lse, I was Oxford, all the best people into the city, you know, very, very few of them stayed to work in politics or, you know, academia. And that's frustrating to me. But listen, I've been out of that world now for 12 years trying to work in think tanks, in politics, in media and I think it's really interesting that somebody like me, a very talented person from working class background, can be the number one in the world at Citibank within a few years and, and takes years and years and years to even get recognized in politics, academia. So really you can point your fingers at the banks all you like. Listen, who, when I was a kid in desperate poverty, staring at the skyscrapers, who got me out of poverty? Was it the welfare state, was it Tony Blair, was it the charities, it
[26:02]
Steph McGovern
was the banks, so on that. Because obviously I grew up in the equivalent, but in the north where I wasn't near any skyscrapers and didn't have the same. We didn't go to grammar school and things like that. I am wondering if what you could See is actually what lots of real people can see. So when you were saying you saw things weren't going to get better, if you'd have asked anyone in the Northeast, they would have said that. I don't think it's about. I know you're a math genius, but I don't think it was about that. I think it was literally, you were working with a lot of people who didn't understand the real world, so couldn't see. Would you say that's.
[26:37]
Gary Stevenson
No, I think, I think you're exactly right. And I think this, this is another thing that really. So the. So I was Citibank Top Trader in 2011, despite what anyone would tell you, every single other year I was there. The top trader was one other guy who in the book is called Billy. And he was working class background, got a job on the cash deal at Halifax when he was 16, worked his way up. Genius working class guy, and I think so every single year I was there, even though there were only maybe a handful of working class traders on the floor, one of those working class traders was number one in the bank. And I think it's because, as you say, as inequality is increasing, most of these people now, you know, they went to an elite private school, they went to elite university, they come from a rich family. You know, they're vacationing in the Hamptons or Lake Comb or whatever, they don't see it. And I go on all of these shows and people say, what do you mean the economy's getting worse? The economy's getting better and it's crazy. And what we're having, one of these consequences of growing inequality is, you know, a crisis of inequality is actively good for the top 5%. Right. And these people think that their lives are getting better.
[27:34]
Steph McGovern
So then in terms of solving it, because, you know, we're going to come on to your ideas around wealth tax and all of that. In terms of solving it, though, it isn't just about taking more money off the rich. It's about the structural problems we have in the economy in terms of education and social mobility and access to all of that.
[27:51]
Gary Stevenson
Yeah.
[27:51]
Steph McGovern
And so this isn't just about taking more money off the rich.
[27:55]
Gary Stevenson
Well, I want to be clear, I'm not trying to take money off the rich.
[27:57]
Steph McGovern
Well, you are, because you want to do.
[27:58]
Robert Peston
Well.
[27:59]
Steph McGovern
No tax.
[27:59]
Gary Stevenson
No.
[27:59]
Steph McGovern
Go on, go on, go on, go on, go on.
[28:01]
Gary Stevenson
We are existing in an economic state of rapid increase in wealth inequality.
[28:07]
Steph McGovern
We are.
[28:08]
Gary Stevenson
UK government wealth has gone from plus 100% of GDP to negative 100% of GDP?
[28:12]
Steph McGovern
Yeah.
[28:13]
Gary Stevenson
30 years ago my dad working for the post office could buy a house. That is not possible now. Working class people have lost their homes. Wealth is being actively lost by the working class, by the middle class and the government and that money is being accumulated by the rich. I am not the person trying to take wealth off anyone. I'm the person trying to stop wealth being taken off the working people of this country.
[28:34]
Steph McGovern
So pre distribution rather than redistribution, is that what you're saying?
[28:36]
Gary Stevenson
Yeah, well, yeah, the redistribution is how I'm trying to stop the redistribution. Listen, there's a reason why 30 years ago working men and women could buy houses. Now they can't. Those houses still exist.
[28:46]
Steph McGovern
But for, I mean this is in your documentary, you talk to someone who said the opportunities weren't there 20 years ago. They weren't there in the north though, like I think again, like the neat number in the north is currently one in four. Twenty years ago when I was a kid there it was one in six. So now everyone's going, oh, it's one in five the national average. That's bad. So it feels like for the north, even more so. Yeah, it's all. We didn't have those opportunities. So like, I know what you're saying. It feels, it's very much from a, from a lens of wealth inequality in the south, but for the north it's been like that for flipping 20, 30 years.
[29:20]
Gary Stevenson
I'm a massive advocate for more voices from the north, you know, and I'm happy to see you on this. You know, recently I've been really trying to boost. There's a great Instagram and Louisa Munch from Roched Out.
[29:29]
Steph McGovern
Yeah, very interesting.
[29:31]
Gary Stevenson
Yeah, well, and you know, I think one of the reasons why people like me is because of working class accent, you know, it's not just, it's, you know, north, south. The truth is how many people sound like me, if you had any talking about economics. Yeah, you know, I mean so, you know, obviously I'm not from the north, you know, I'm from, I'm from East London and I know it's not the same. You know, we're there, we can see the skyscraper because you guys are.
[29:49]
Steph McGovern
And it's just that point though, it's just it hasn't like, it's not a sudden change and I think more so in south it is now it's much harder to afford a property in the south now it's much harder to get those opportunities. But it's been like that in the north for decades. So it feels so when we talk about. So, you know, like I do think we need to take more tax off the wealthy and that's, you know, I totally agree with you on all of that, but I still think we have this fundamental problem that no one ever talks about, which is education and access to opportunities when you are not in an area where the everything is around you.
[30:21]
Gary Stevenson
Like, let's go ahead together and fix it. Because, you know, these problems which as you say, as you say, have been, you know, going on for a lot longer in the north, you know, this is, you know, we are in the south now is the opportunity is lost in many ways. So, you know, let's break that division.
[30:36]
Steph McGovern
I'm not trying to make it me versus you or north versus south, but it's not, it's not binary, is it? It's not, it's so much more complex then we, the wealth have got more powerful and richer and, and I just think it's way more complex than that. Well, that's part one of our interview with Gary Stevenson. It's interesting because he does have a point about he looks at this, lots of different perspectives because he has grown up as a working class kid, he has, you know, done the academic thing with economics, he's made a load of money in the city and now he's challenging politics. And it is an unusual, I guess, framing in which to create these ideas from you.
[31:17]
Robert Peston
And I constantly talk about how extremes of income and wealth inequality are a real problem and whether it's the cohesion of society or indeed whether it is optimal for improving living standards and generating growth. And so there's quite a lot of common ground, I would say, between you, me and Gary. But what we now need to get onto is his ideas for fixing some of these problems and whether they'll actually work.
[31:47]
Steph McGovern
Yeah, that's gonna be in the next episode with Gary Stevenson on the Rest is Money. Bye bye.
[31:52]
Robert Peston
Goodbye.

Summary6 min read

The Rest Is Money – Episode 294: Gary Stevenson – Is being a city trader bad?

Date: July 8, 2026
Hosts: Robert Peston & Steph McGovern
Guest: Gary Stevenson (Equality Economist, Ex-top City Trader)

Episode Overview

This episode centers on the remarkable story and shifting values of Gary Stevenson, who went from a working-class East London kid to Citibank's top trader and a self-made millionaire in his 20s. The hosts explore what it’s really like being a city trader, the psychology of sudden wealth, and the wider implications of financialization and inequality in Britain. Stevenson shares critical reflections on his career, the effect of wealth distribution, and his arguments for rethinking economic priorities—specifically, his concerns about the rapid growth in wealth inequality and its impact on society.

Key Discussion Points & Insights

1. Gary’s Background: Rags to Riches (03:59–06:50)

Growing Up Poor:
Gary explains his modest upbringing, living in a small terrace by the railway in East London, sharing a bedroom with his brother.
- “It's better than being poor. It's hard to be poor. ...I grew up…like pretty poor…small little terraced house.” (03:59)
- Talks about his journey through grammar school (expelled in year 11 for a cannabis incident), studying independently at home and achieving top grades.
Drive to Succeed:
Entered LSE, won a competition, and quickly rose to financial stardom as Citibank’s number one trader at age 24.

2. The City Trading Experience: Psychology of Wealth & Burnout (06:50–14:01)

Sudden Wealth & Shock:
Gary recalls the utter shock of his first bonus—£395,000 at age 23—and the surreal disconnect from his humble roots.
- “I remember, like, going into that...the top number is 395…And I'm pointing at the number and saying, is it that? And...he suggests that. And then I…said, wow, yeah, that's a lot of money.” (12:53)
- “I used to get for lunch every day, go to Tesco and buy two scotch eggs for 75p...and then suddenly one day somebody just gives you 395,000 pounds and it's overwhelming.” (14:01)
Burnout & Obsession:
Stevenson describes trading as an “addiction” and was fully immersed for several years, sacrificing everything for work.
- “It was an addiction, an obsession...if you give me a good computer game, I'll wake up and it'll be like, yeah, completed…Like, I just want to figure out games and I want to win…this was…not only was it a game, it was a game that could make me millions of pounds…” (16:19)
Guilt & Motivation:
He explores whether guilt over out-earning his hard-working parents drove his later activism, admitting his struggles with purpose—particularly after success with his book.
- “When I wrote the book...that felt a little bit like, God, what have I done to deserve this? ...I thought I was the best when I was a kid.” (17:19)

3. Trading & the Financial System: Value to Society? (18:24–21:56)

Explaining City Trades:
Stevenson details his work trading short-term interest rate products and his edge—betting correctly that interest rates would remain low post-2008, despite markets repeatedly assuming a “normal” recovery.
- “Markets pretty much consistently thought that rates were going to renormalize in the next 12 to 18 months...I just started to consistently say, well I'll lend at 3% and then I'll just wait because...the base rate would stay zero.” (09:55)
Utility & Critique of Finance:
Robert probes the value of modern finance, questioning whether the industry mainly serves itself rather than society or the so-called “real economy.”
- Peston: “[Much] of financialization...is simply trading that allows smart people…to make a large amount of money from betting...it is simply...extracting [rent].” (19:39)
- Gary’s Mixed Feelings: “I think it's a phenomenal waste of talent in many, many cases and I think a lot of dodgy stuff goes on and I've seen a lot of dodgy stuff go on.” (25:03)

4. Class, Opportunity, and Why Working-Class Traders Excel (26:36–27:33)

Insight from Experience:
Steph suggests Gary's trading success links to real-world intuition rather than mathematical genius, noting working-class traders often understand “it’s not going to get better” while others—educated at elite schools—don’t see it coming.
- Gary agrees: "Every single year I was there...one of those working class traders was number one in the bank…I think it's because…as inequality is increasing, most...come from a rich family...they don't see it." (26:36)

5. Wealth Inequality: Diagnosis & Debate (28:01–29:48)

Structural Crisis:
Gary insists the rapid growth of inequality is at the root of Britain’s social and economic malaise.
- “We are existing in an economic state of rapid increase in wealth inequality...wealth is being actively lost by the working class, by the middle class and the government and that money is being accumulated by the rich.” (28:01)
Not ‘Taking from the Rich’:
Gary clarifies he's not advocating for punitive wealth confiscation, but preventing ongoing extraction from the working population.
- "I'm not the person trying to take wealth off anyone. I'm the person trying to stop wealth being taken off the working people of this country." (28:12)
Regional Perspective:
Steph argues that regional disparities are long-standing, with fewer opportunities and more pronounced inequality in the North, while Gary advocates for more regional voices and unity over division.

6. What Next? (31:17–31:46)

The episode closes with the promise that part two will explore Gary’s concrete solutions for the problems discussed, including taxation and systemic reform.

Notable Quotes & Memorable Moments

Gary Stevenson on Sudden Wealth:
“All the stories are there in my book. …In 2011 when I was just 24, I was Citibank's number one trader in the world. Got paid like millions of dollars in one year. So I made a lot of money very quickly. And, well, I kind of had definitely a burnout. Maybe you could stretch it and call it a breakdown.” (04:10)
On Living Standards & Economic Prediction:
“During the crisis itself...there was this really strong narrative that things will get better really quickly...but obviously we now know that things never really got better after 2008...” (07:03)
Gary on Social Mobility via Finance:
“Really you can point your fingers at the banks all you like. Listen, who, when I was a kid in desperate poverty, staring at the skyscrapers, who got me out of poverty? Was it the welfare state...it was the banks.” (25:03)
Steph on Regional Inequality:
“So when you were saying you saw things weren't going to get better, if you'd have asked anyone in the Northeast, they would have said that… I think it was literally, you were working with a lot of people who didn't understand the real world, so couldn't see.” (26:02)
Gary on Inequality and Redistribution:
“I'm not the person trying to take wealth off anyone. I'm the person trying to stop wealth being taken off the working people of this country.” (28:12)
Gary on The Game of Trading:
“Not only was it a game, it was a game that could make me millions of pounds by understanding the world, by competing with the best people in the world. So, yeah, it was...an obsession.” (16:19)

Timestamps for Important Segments

03:59 – Gary’s early life, school expulsion, and academic drive
06:54 – First big trading bonus and psychological impact
08:21 – Causes of the post-2008 economic malaise
09:55 – The mechanics of Gary’s trading edge
12:36 – Reflections on trader culture and burnout
16:19 – The addictive nature of trading
18:24 – The debate over social value of high finance
25:03 – Finance as (dubiously) a vehicle for social mobility
26:36 – Role of real-world experience in forecasting crisis
28:01 – Rapidly rising inequality; not just about “taxing the rich”
29:19 – North-South divide and the complexity of opportunity loss
31:17 – Teaser for Part Two: How to Fix It

Structure and Tone

The tone is fast-paced, direct, and reflective—marked by Gary's unfiltered recollections and criticisms, Steph’s no-nonsense regional perspective, and Robert’s sharp analytical probing. The discussion threads together personal narrative and sweeping macroeconomic themes to underline how the stories of individuals in finance can reflect wider failings and potentials within British society and policy.

Looking Ahead

Part two (next episode) promises:

Gary's explicit proposals for wealth taxation and systemic reform
Further analysis of policy solutions for inequality
Continued focus on regional, class, and social mobility angles

Loading summary

Transcript122 lines

[00:01]
Gary Stevenson
I think we just fundamentally underestimate how important the wealth distribution is. So I get my first big bonus beginning of 2010.
[00:07]
Robert Peston
And how much was that?
[00:08]
Gary Stevenson
It was 395,000 pounds. March 2020, the very beginning of COVID There'll be an inflation crisis, a cost of living crisis. The gold price will go up massively, stock prices will go up massively, house prices will go up massively. Government austerity, huge increase in poverty in March 2020. I said that and we could have prevented that.
[00:24]
Steph McGovern
So this isn't just about taking more money off the rich.
[00:27]
Gary Stevenson
Well, I want to be clear, I'm not trying to take money off the rich.
[00:29]
Steph McGovern
Well, you are because you want to do well. Tax. No, go on, go wrong, go on.
[00:33]
Gary Stevenson
We are existing in an economic state of rapid increase in wealth inequality. If you're making 5% on a billion pounds, you're making 50 million pounds a year. So one billionaire is making about a million pounds, maybe 2 or 3 million pounds a week, passive income.
[00:46]
Robert Peston
I'm just going to point out. Yeah, right. That what you haven't done.
[00:50]
Gary Stevenson
Yeah.
[00:51]
Robert Peston
Is address the point that I was making earlier, which is it's the taxpayer who picked up the bill.
[00:56]
Steph McGovern
Support for this episode comes from Octopus Energy and the founder and CEO Greg Jackson is with us now. So, Greg, talk to me about Kraken. What is it and why is it spinning off from Octopus Energy?
[01:09]
Robert Peston
When we built Octopus, we also built a software platform like an operating system like iOS or Android on your phone to enable energy companies, utilities, starting with Octopus, but frankly anyone in the world to be much more efficient, to use vast amounts of data and to be able to become more innovative and to serve their customers better. That piece of software is Kraken. We've used it not only for Octopus, but companies in the UK like EDF and E On have used it to improve their business too. But you know what? It turns out, over time companies realized that they were licensing from a competitor and so we've had to spin it off so it can reach its full potential.
[01:52]
Steph McGovern
Yeah, makes sense. Craig, thank you. Right, we're going to go to the episode. This episode is brought to you by Google Chrome.
[01:59]
Gary Stevenson
You think you know a browser, but
[02:01]
Steph McGovern
Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50 page restoration block. Or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it, ready to make anything online make sense.
[02:15]
Gary Stevenson
There's no place like Chrome.
[02:17]
Steph McGovern
Check responses, setup required compatibility and availability. Various 18
[02:23]
Robert Peston
when you need to build
[02:24]
Steph McGovern
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[03:02]
Robert Peston
Hello and welcome to the Rest Is Money with me, Robert Peston.
[03:06]
Steph McGovern
And me, Steph McGovern. And with us today, Gary Stevenson, who is an equality economist. He's here to tell us why taxing millionaires is the way to make things first bearer. But we've got so much to talk to Gary about that we're going to split this into two episodes. As I'm sure a lot of you know, Gary's a working class kid who became a millionaire in his 20s by being one of the best traders in the city betting against the economy. So we're going to talk to him about why he kept betting on the economy going wrong and how this relates to his obsession now with wealth inequality. So here's part one with Gary Stevenson. Gary, thanks for joining us. So you're a rich lad. You've done well for yourself. You know, you made quite a bit of money early on in your life in your 20s and kind of defied the odds to do that. But you think rich people should be paying more tax, don't you? You've kind of got a problem with being rich, haven't you?
[04:00]
Gary Stevenson
It's better than being poor. It's hard to be poor. Yes. I grew up, I wouldn't say very poor, but like pretty poor. You know, small little terraced house.
[04:09]
Robert Peston
Council house, was it, or.
[04:10]
Gary Stevenson
No, it was the council house. Yeah. Just, just a little terrace house on a little terrace street next to the railway, you know, sharing a bedroom with my brother in London, East London, always sort of dreamed of being rich and making money. And obviously all the stories are there in my book. People probably know it by now. Got into London School of Economics. I won a competition, got a job in the city. In 2011 when I was just 24, I was Citibank's number one trader in the world. Got paid like millions of dollars in one year. So I made a lot of money very quickly. And, well, I kind of had definitely a burnout. Maybe you could stretch it and call it a breakdown. I mean, my Situation is quite specific because the exact way that I made my money was I was betting on, you know, like, the economy is going to collapse and living standards will collapse. So I'm sure that played into it. But look, I don't want to, you know, obviously, of course money doesn't make you happy. It's easy for me to say that now, somebody with money, but I don't want to be disrespectful for what I have. And I do understand the difficulties of poverty. I mean, that's the whole reason I do the work that I do.
[05:13]
Steph McGovern
Yeah. And when you say you went to hello scene stuff, did you. You went to grammar school, did you?
[05:18]
Gary Stevenson
Yeah, got into a grammar school. Ilford County High School in Barkingside, East London. Got expelled when I was in year 11 for selling a small amount of cannabis, which I don't condone.
[05:29]
Steph McGovern
Before you did your GCSes then?
[05:31]
Gary Stevenson
Yes, I got expelled just the beginning of year 11, which is GCSE year. Yeah. And then I had. I basically didn't have a school for pretty much the whole of year 11. I had to, like, study at home. Yeah. I didn't even have a desk at home, so I had a little. Little wooden board I'd put on the floor, lie on the floor and do my own work. But a stars and three A's, though. Not bad for wooden board.
[05:48]
Steph McGovern
Did you do that without any, like, how did you do the exams? Where did you sit?
[05:53]
Gary Stevenson
So basically the school, rather than expelling me, they basically like suspended me forever because the last year, so they, like, it suspended me and extended my study leave so I couldn't go back. So they would, they would email my parents, like, these are their homeworks and I would get them.
[06:05]
Steph McGovern
They must have known you were going to get good grades, though, so that's probably why they wanted you.
[06:08]
Gary Stevenson
Maybe. I don't know. I don't know if that's why they kept me in. But yeah, that was. I mean, it's crazy because I just turned 16 when I expelled. God, it's a lifetime ago, but it was a lot. But in. In a weird way, it was good for me. In. In a weird way because I was that annoying kid sitting in the back of the class, like, class clown. Not really studying, not really doing my homework. But then obviously being expelled, I had to get my head down. So it was kind of the first time in my life that I was like, oh, I'm gonna have to work for this.
[06:33]
Robert Peston
You learned how to apply yourself?
[06:35]
Gary Stevenson
Yeah. And also just to work and study. Independently, because previously I would just go into school and you know, not to like brag too much. Like it was a bit easy for me and I would just. You'd win the classes and you'd get the grades. Because if you, you know, if I didn't have school to go to, I did have to study myself that year.
[06:50]
Steph McGovern
Yeah. So obviously fast forward, you've, you know, as we said, become very successful.
[06:55]
Gary Stevenson
Yeah.
[06:56]
Steph McGovern
And very rich. But just tell us what the problem you have with the fact that people are rich because it comes across as that.
[07:03]
Gary Stevenson
Yeah, listen, I've got no problem with people getting rich. I've got no problem with people making money. My job from 2008 until 2014 was, you know, to summarize, a little bit, basically betting on the strength of the economy, obviously 2008 financial crisis. And what people don't know about the financial crisis is at the time, it was actually really similar to Covid, which is during the crisis itself. Obviously things are really bad, but there was this really strong narrative that things will get better really quickly because, you know, zero interest rates and quantitative easing and government deficits and all this kind of stuff. But obviously we now know that things never really got better after 2008. You know, we had a really weak economy for a long time. I studied maths and economics at London School of Economics and I became fascinated in this sort of early 2010s period of like, why are we like consistently wrong in our predictions about the economy? And it was fascinating to me and I wanted to understand that. And I thought a lot about it and I've studied it since basically, I think from my work in academia and economics and from in finance and economics, I think we just fundamentally underestimate how important the wealth distribution is. And I think if wealth distribution, if wealth inequality grows very quickly, which it has, especially since COVID but even before, I just think that causes really rapid increases in poverty and I don't think that's going to reverse.
[08:21]
Robert Peston
So we're going to come on to that in more detail later. What were the instruments that you were betting on as a trade? And just to be clear, were you. You were actually taking positions for the bank, were you?
[08:36]
Gary Stevenson
So I was a short term interest rates trader.
[08:38]
Robert Peston
Yeah.
[08:40]
Gary Stevenson
And what my job kind of officially was was market making foreign exchange swaps, which might, I don't know if that would mean something to anyone. Foreign exchange swaps are basically like, they're short term loans. It's like it's the most common instrument that like big corporations or pension funds will use for like very short term funding, like, like rolling daily funding. So they, they end up being driven by the base rate, the central bank base rate. And it's a funny one because the job officially is market making. So big corporation, whatever, Samsung wants to do a euro dollar FX swap, basically do a loan and you do do a lot of that. And especially in 2011 I was doing an enormous amount of this providing funding for corporations.
[09:23]
Robert Peston
And this is overnight money, is it?
[09:25]
Gary Stevenson
So anything up to two years, Anything up to two years we could go a little bit longer. But it's a really heavy focus on base rates. So what is the central bank base rate going to be in 12 months? What is it going to be in 18 months? You might go as long as 36 months, two years.
[09:41]
Robert Peston
And when you talk about the bet that you made, you provided the credit on the basis that the cost of money, the official bank rate was going to remain effectively close to zero for longer.
[09:55]
Gary Stevenson
Yeah, exactly. So post 2008 we obviously, we now know that rates stayed 0 until 2022 I think. But during that period after 2008, basically for the whole period from 2008 until right up into Covid markets pretty much consistently thought that rates were going to renormalize in the next 12 to 18 months. So obviously historically normal levels of rates are sort of more 4 or 5%, which meant that if you wanted to borrow money in a year's time, if you wanted to like secure your interest rate on a loan maturing next year, you would be having to pay maybe 3% even though the rate now is 0%. And starting in 2011, I just started to consistently say, well I'll lend at 3% and then I'll just wait because I, I became quite confident that the base rate would stay zero. So you're lending at 3%, you wait a year, the base rate zero and you make your 3%.
[10:47]
Steph McGovern
Well, what was making you think that that was going to happen? That it was going to sit?
[10:51]
Gary Stevenson
Yeah, so I sat. You know, I started June, June 2008, very young. 21. You watch the crisis happen. You know, I've studied economics. Yeah, everybody thinks interest monetary policy is powerful. We, you, we cut rates to zero. Obviously we now saw that happen for a long time. At the time it was, you know, unprecedented outside of Japan, you know, massive move, you know, quantitative easing, massive government deficits and oh, like everybody else studied economics, you're told that's going to have a massive impact. Yeah, and it would have a massive impact. So everybody thought 2009 massive recovery. It's really similar to Covid, by the way. People kept saying, we're going to have a massive recovery. Then 2009 comes recovery, doesn't happen. 2010, there's going to be massive recovery. 2010 comes recovery, doesn't happen. 2011, there's going to be massive recovery. So by the beginning of 2011, you know, I've been doing this job full time for nearly three years and all I've seen is just consistently people being wrong and wrong and wrong and wrong. And, you know, I can't lie. Like, you sit there and you work with these traders. I'm not going to say all traders are idiots, because they're not. They weren't all the smartest guys, if I'm totally honest. And it was fascinating to me because, you know, you study Atlanta School Economics, big prestigious economics university. You go and you work with guys who are getting paid millions of pounds a year and you think, these are the guys, and then you realize, like, they're just wrong every year. And to me, honestly, it was incredibly exciting. It was incredibly exciting to realise, like, wow, like, we're wrong on this massive thing. It's huge. This is the direction of the global economy.
[12:12]
Robert Peston
Now, looking back on it, right, so you're a young person, you're suddenly finding yourself, you know, to use that expression, filthy rich.
[12:20]
Gary Stevenson
Right.
[12:21]
Robert Peston
You're also surrounded by a lot of testosterone. Quite a lot of people who you've just said you do respect some of them, but quite a lot of them you didn't really respect what was going on. You talk about it as burnout. Looking back on it, what happened to. Because you had to take quite a lot of time off work, didn't you?
[12:37]
Gary Stevenson
Yeah, I think. I think if I look back at one moment, I always remember my first bonus. So I started working in mid-2008, so my first full year was 2009. So I get my first big bonus beginning of 2010.
[12:49]
Robert Peston
And how much was that?
[12:50]
Gary Stevenson
It was £395,000, which, presumably, given your
[12:54]
Robert Peston
background, I mean, that's a lot.
[12:55]
Gary Stevenson
That's a lot of money for anybody. I've been led to believe that it was going to be about 100, 120,000 pounds.
[13:01]
Robert Peston
Right.
[13:01]
Gary Stevenson
And then I remember, like, going into that, you got to remember this is. I mean, that's a lot of money. Even now. This is 15 years ago. Yeah. Beginning 2010, I'm 23 years old. You know, I come from a very poor background and I remember being in that meeting room and having my boss, massive lad, Sitting there, piece of paper on the table and I'm looking for 100, 120. Yeah. And it's not there. And the top number is 395. And I'm pointing at the number and saying, is it that? And he suggests that. And then I literally remember like it was yesterday. I remember saying, wow, yeah, that's a lot of money. And what did you do with that money? Well, the truth is nothing really. I just invested it. But I remember the next thing I remember is I'm on the desk.
[13:39]
Robert Peston
But. So you weren't one of those traders who then went straight down, you know, the club.
[13:46]
Gary Stevenson
I wouldn't know what to 100, 120,000 pounds. You know, I might have.
[13:50]
Robert Peston
But the burnout wasn't, it wasn't related to like lifestyle stuff, which so many traders would do.
[13:54]
Gary Stevenson
You know, don't believe the rumors. No, I was never into, I was never into the parties and the various substance abuses.
[14:01]
Robert Peston
That's what I'm asking.
[14:01]
Gary Stevenson
Yeah. No, for me, what it was this. When this money came in, I, I was in shock. And I remember, I remember being on the desk and I feel like I was going to cry. I remember this. And then I was really lucky. I worked with another guy who was, he was a bit older, but he was from a working class background. In the book he's called Billy from. He's a Scouser and he could see. And he just said, look, go and sit down and like take his. There's a little patch of grass in the middle of Canary Wharf. I don't know if you've probably been there. And the next thing I remember, I'm on the little patch of grass and it's a funny little patch of grass because there's like three skyscrapers on three sides and there's a little, little bit of light coming through. And in my shock, I hadn't taken my coat, I hadn't taken my. And it's obviously bonus days in January, sitting shivering on this little patch of grass and you just like, you know, when I was at university, I used to get for lunch every day, go to Tesco and buy two scotch eggs for 75p. That's what I had for lunch every day. And then suddenly one day somebody just gives you 395, 000 pounds and it's overwhelming. Yeah, you just think all those coach eggs. But you know, I thought about my dad, you know, you know, my dad, you know, we grew up in this little tiny house and my dad worked for the post office and you know, he would wake up early and the train used to take into Central, would go past the back of my house before me and my brother were awake. And I remember my mum would come and wake us up in the morning to see if we could just see him waving as he went past on the train. And. And then he comes back late in know he's not. I'm sure your memories of your parents are probably similar, right? You know, you have these. You just think how hard he worked.
[15:30]
Steph McGovern
Yeah.
[15:30]
Gary Stevenson
For 20 grand a year. And I grew up in a very, like, Pakistani immigrant area with a lot of, you know, poor families with the dad sleeping on the sofa because there's not enough bedrooms. And you just think, like. And then suddenly somebody gives you this395,000 pounds. And I was thinking that. But then the next thing you think is, well, if I'm 23 and I got 395, 000 pounds, what did, what did Reaper get? What did. What did. That guy over there with the pink shirt. And then suddenly you're like, well, why. Why are they allowed to get paid millions and not us? You know, and then. And the truth is, it became an obsession. And, you know, the way I describe it in the book was, so how
[16:03]
Robert Peston
many years were you totally immersed in the sort of. So trading, you know, trading.
[16:08]
Gary Stevenson
That would have been the beginning of 2010. 2010. I was right into it. 2011. I was completely obsessed.
[16:15]
Robert Peston
Yeah.
[16:15]
Gary Stevenson
And then 2011 was when I was the top trader in the bank.
[16:17]
Robert Peston
So it was an addiction, really.
[16:19]
Gary Stevenson
An addiction, an obsession. Yeah. Yeah. I don't. Yeah, I think it's just I'm the kind of guy that I have to be careful about computer games. If you give me a good computer game, I'll wake up and it'll be like, yeah, completed, you know, I mean, like. Like, I just want to figure out games and I want to win and, you know, and this was. Not only was it a game, it was a game that could make me millions of pounds by understanding the world, by. By competing with the best people in the world. So, yeah, it was, you know, in the end I bought a massive. I bought like, not a massive. I bought a nice apartment, ripped all the furniture out, didn't even furnish it, and all I was doing was waking up. Trading. Yeah, it was. It was an obsession.
[16:54]
Steph McGovern
Did you feel at the start guilty then for, like, earning that much money when you talk about your dad? Because I have this with my mom who works in the NHS for 40 years and, you know, and you think, God, when you compare how hard we've had to work compared to our parents, it's incredibly. It's miles apart. So did you. Do you think this obsession came from guilt as well?
[17:15]
Gary Stevenson
Yeah, me. Me personally, I think no.
[17:19]
Steph McGovern
Right.
[17:19]
Gary Stevenson
If you want, you can call my therapist up and ask him. You know, it's a funny one because obviously, more recently I wrote this book and the book was really successful. And I personally think the book is amazing. Documentary is very good as well. But, like, in a weird way, I felt more guilt when I wrote. More guilty when I wrote the book. Because the thing is, I was winning math competitions when I was a teenager and I was lying on the floor, you know, studying to get into lse. And I got into LSE and I was the best at LSE and I had the best grades at lse. So, like, that felt like I've worked for it and I've deserved it, but when I wrote the book, know. So my sister works in theater and in writing and I see how hard she works. You know, I had a friend of mine, he's actually. He's a character in the book, Harry Sandby, his mum, I remember, she, she. All she wanted was get a book published and, like, for me to just write a book with no background in writing and have the book be, you know, the number one book in the country that felt a little bit like, God, what have I done to deserve this? But the truth is, like, I don't know if this says a lot about me. Like, I thought I was the best when I was a kid. I thought. I thought nobody deserves it more than me.
[18:17]
Steph McGovern
Yeah.
[18:18]
Gary Stevenson
But, you know, I think when you add in that element, I was literally betting on the collapse of society and the collapse of living standards.
[18:24]
Robert Peston
We are talking about the financial economy now, and which is where you work.
[18:29]
Gary Stevenson
Right.
[18:30]
Robert Peston
So what is your view about the sheer volume of financial transactions that are broadly unrelated to the real economy? Because there are quite a lot of people who say the financialization of the global economy is. Is apartment Anything else? One of the sources of the kind of wealth inequality that you rail again. So, you know, in other words, looking back on what you did for a living, would you rather those jobs didn't exist?
[19:01]
Gary Stevenson
Listen, I would rather we lived in a world where our best and brightest young economists were. Had opportunities to work in jobs where they protected our country's economy.
[19:14]
Robert Peston
Because looking back on what you did for a living, as it were.
[19:19]
Gary Stevenson
Yeah.
[19:20]
Robert Peston
Was it in. I mean, it was obviously in, you know, your benefit because you got these Bonuses, the bank loved you because you were generating profit for them. But if you look at its impact on other people's lives, what do you think?
[19:34]
Gary Stevenson
Well, you know, if I'm totally honest, a big part of me doesn't really like the demonization of the bankers and the finance workers.
[19:40]
Robert Peston
I'm not demonizing, I'm asking you a question about whether essentially. Yeah, you know that explosion of so the financial economy in the UK it's about 10, 11% of all our GDP. And there is some of that banking investment that is actually about helping businesses that employ lots of people raise capital at an effective, at an efficient interest rate. But there is quite a lot which is rent extraction. It is simply trading that allows smart people effectively to make a large amount of money from betting. Now there are some people who say that means the market is super efficient, but actually I don't think it is. I think a lot of the time it is simply and we saw this in the run up to the financial crisis, a lot of what was going on was hiding risk so that a smart people could get the money out before the whole thing collapsed.
[20:46]
Gary Stevenson
Yeah, this is an interesting one to me and I've got a lot of mixed emotions on it because you know, I've been basically doing economics as my full time job for like more than 20 years now in, in variety of ways. Right. So obviously I've been lse, I've done a two year masters at Oxford, I was in the City trading for a long time. Now I've got a YouTube economics channel, I talk to politicians, I sort of float around the think tank world, I've been in the media. So really I don't think you'll see many people who've had a broader view of the different roles and the different economic spaces in our society than me. And if I'm totally honest with you, I miss the trading floor because you know, I've been away from the trading floor for when I get 2014, so nearly 12 years now and in the last six years obviously I've been very outspoken politically saying listen, if you don't do something about inequality, society is going to collapse, living standards will collapse, there'll be a big increase in poverty and you know, a lot of people disagree with me. I'm sure you'll go on to that. And the, and back when I worked on the trading floor a lot of people disagreed with me as well. And when I was on the trading floor and a lot of people disagreed with me and it was a lot of richer posher People. Because those are the people in that space. I loved it. I loved it.
[21:57]
Steph McGovern
Because you were underestimated, I bet.
[21:59]
Gary Stevenson
Listen, if we're on the trading floor right now and I say to you, inequality is going to grow, it's going to ruin the economy, it's going to ruin living standards, and you say, no, Gary, you're wrong. I have the right to say, okay, everybody, wallet's out table now, and I'm taking it home. I'm taking your money home. I'm taking your money home. And at the end of the year, everybody's going to turn around and say, who got it right? Gary got it right. You know, now I've been doing the job that I do now for six years, and, you know, the first thing I ever did was I wrote an article for Open Democracy and the Guardian. March 2020, mark the very beginning of COVID saying there'll be an inflation crisis, a cost of living crisis, the gold price will go up massively, stock prices will go up massively, house prices will go up massively, government austerity, huge increase in poverty. In March 2020, I said that. And we could have prevented that. And we are still. And now I'm still. My life is still to be constantly called an idiot by posh people, and I cannot get them to get their wallets out. And it's like, at least. At least in the finance, I can make these posh boys pay me. And at the end of the year, they have to recognize. They have to recognize that I was right. And listen, yeah, I worked with a lot of posh boys, right? And at the beginning, when I started working with them, and I said, oh, the problem is inequality. The economy is going to collapse. They laughed in my face and they messaged me every week, what's going to happen, Gary? I went to Japan to talk to my Japanese colleague and said, listen, I've written this book. You're in it. Just wanted to let you know I've changed your name and stuff. And he said to me, okay, but Gary, what's going to happen to interest rates? That's all these guys want from hand. I miss that space where somebody can be respected regardless of their class background, simply for consistently being demonstrably right.
[23:30]
Robert Peston
Gary, this has been great fun, but we just need to take a quick break.
[23:38]
Steph McGovern
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[24:37]
Robert Peston
I'm just going to point out that what you haven't done is address the point that I was making earlier, which is a lot of what happens in the City of London is about hiding risk, extracting, as I say, rent or profit from what is essentially a con in many cases. And then as we saw in 2007, eight, it's the taxpayer who picked up the bill.
[25:03]
Gary Stevenson
Yeah, listen, look, I'm not here to advocate for the fight. If you read my book, you know, and I think it's well known, like I'm not the biggest fan of the finance industry. I think it's a phenomenal waste of talent in many, many cases and I think a lot of dodgy stuff goes on and I've seen a lot of dodgy stuff go on and I wish, I wish that, you know, so many of the smartest economic brains, I was at lse, I was Oxford, all the best people into the city, you know, very, very few of them stayed to work in politics or, you know, academia. And that's frustrating to me. But listen, I've been out of that world now for 12 years trying to work in think tanks, in politics, in media and I think it's really interesting that somebody like me, a very talented person from working class background, can be the number one in the world at Citibank within a few years and, and takes years and years and years to even get recognized in politics, academia. So really you can point your fingers at the banks all you like. Listen, who, when I was a kid in desperate poverty, staring at the skyscrapers, who got me out of poverty? Was it the welfare state, was it Tony Blair, was it the charities, it
[26:02]
Steph McGovern
was the banks, so on that. Because obviously I grew up in the equivalent, but in the north where I wasn't near any skyscrapers and didn't have the same. We didn't go to grammar school and things like that. I am wondering if what you could See is actually what lots of real people can see. So when you were saying you saw things weren't going to get better, if you'd have asked anyone in the Northeast, they would have said that. I don't think it's about. I know you're a math genius, but I don't think it was about that. I think it was literally, you were working with a lot of people who didn't understand the real world, so couldn't see. Would you say that's.
[26:37]
Gary Stevenson
No, I think, I think you're exactly right. And I think this, this is another thing that really. So the. So I was Citibank Top Trader in 2011, despite what anyone would tell you, every single other year I was there. The top trader was one other guy who in the book is called Billy. And he was working class background, got a job on the cash deal at Halifax when he was 16, worked his way up. Genius working class guy, and I think so every single year I was there, even though there were only maybe a handful of working class traders on the floor, one of those working class traders was number one in the bank. And I think it's because, as you say, as inequality is increasing, most of these people now, you know, they went to an elite private school, they went to elite university, they come from a rich family. You know, they're vacationing in the Hamptons or Lake Comb or whatever, they don't see it. And I go on all of these shows and people say, what do you mean the economy's getting worse? The economy's getting better and it's crazy. And what we're having, one of these consequences of growing inequality is, you know, a crisis of inequality is actively good for the top 5%. Right. And these people think that their lives are getting better.
[27:34]
Steph McGovern
So then in terms of solving it, because, you know, we're going to come on to your ideas around wealth tax and all of that. In terms of solving it, though, it isn't just about taking more money off the rich. It's about the structural problems we have in the economy in terms of education and social mobility and access to all of that.
[27:51]
Gary Stevenson
Yeah.
[27:51]
Steph McGovern
And so this isn't just about taking more money off the rich.
[27:55]
Gary Stevenson
Well, I want to be clear, I'm not trying to take money off the rich.
[27:57]
Steph McGovern
Well, you are, because you want to do.
[27:58]
Robert Peston
Well.
[27:59]
Steph McGovern
No tax.
[27:59]
Gary Stevenson
No.
[27:59]
Steph McGovern
Go on, go on, go on, go on, go on.
[28:01]
Gary Stevenson
We are existing in an economic state of rapid increase in wealth inequality.
[28:07]
Steph McGovern
We are.
[28:08]
Gary Stevenson
UK government wealth has gone from plus 100% of GDP to negative 100% of GDP?
[28:12]
Steph McGovern
Yeah.
[28:13]
Gary Stevenson
30 years ago my dad working for the post office could buy a house. That is not possible now. Working class people have lost their homes. Wealth is being actively lost by the working class, by the middle class and the government and that money is being accumulated by the rich. I am not the person trying to take wealth off anyone. I'm the person trying to stop wealth being taken off the working people of this country.
[28:34]
Steph McGovern
So pre distribution rather than redistribution, is that what you're saying?
[28:36]
Gary Stevenson
Yeah, well, yeah, the redistribution is how I'm trying to stop the redistribution. Listen, there's a reason why 30 years ago working men and women could buy houses. Now they can't. Those houses still exist.
[28:46]
Steph McGovern
But for, I mean this is in your documentary, you talk to someone who said the opportunities weren't there 20 years ago. They weren't there in the north though, like I think again, like the neat number in the north is currently one in four. Twenty years ago when I was a kid there it was one in six. So now everyone's going, oh, it's one in five the national average. That's bad. So it feels like for the north, even more so. Yeah, it's all. We didn't have those opportunities. So like, I know what you're saying. It feels, it's very much from a, from a lens of wealth inequality in the south, but for the north it's been like that for flipping 20, 30 years.
[29:20]
Gary Stevenson
I'm a massive advocate for more voices from the north, you know, and I'm happy to see you on this. You know, recently I've been really trying to boost. There's a great Instagram and Louisa Munch from Roched Out.
[29:29]
Steph McGovern
Yeah, very interesting.
[29:31]
Gary Stevenson
Yeah, well, and you know, I think one of the reasons why people like me is because of working class accent, you know, it's not just, it's, you know, north, south. The truth is how many people sound like me, if you had any talking about economics. Yeah, you know, I mean so, you know, obviously I'm not from the north, you know, I'm from, I'm from East London and I know it's not the same. You know, we're there, we can see the skyscraper because you guys are.
[29:49]
Steph McGovern
And it's just that point though, it's just it hasn't like, it's not a sudden change and I think more so in south it is now it's much harder to afford a property in the south now it's much harder to get those opportunities. But it's been like that in the north for decades. So it feels so when we talk about. So, you know, like I do think we need to take more tax off the wealthy and that's, you know, I totally agree with you on all of that, but I still think we have this fundamental problem that no one ever talks about, which is education and access to opportunities when you are not in an area where the everything is around you.
[30:21]
Gary Stevenson
Like, let's go ahead together and fix it. Because, you know, these problems which as you say, as you say, have been, you know, going on for a lot longer in the north, you know, this is, you know, we are in the south now is the opportunity is lost in many ways. So, you know, let's break that division.
[30:36]
Steph McGovern
I'm not trying to make it me versus you or north versus south, but it's not, it's not binary, is it? It's not, it's so much more complex then we, the wealth have got more powerful and richer and, and I just think it's way more complex than that. Well, that's part one of our interview with Gary Stevenson. It's interesting because he does have a point about he looks at this, lots of different perspectives because he has grown up as a working class kid, he has, you know, done the academic thing with economics, he's made a load of money in the city and now he's challenging politics. And it is an unusual, I guess, framing in which to create these ideas from you.
[31:17]
Robert Peston
And I constantly talk about how extremes of income and wealth inequality are a real problem and whether it's the cohesion of society or indeed whether it is optimal for improving living standards and generating growth. And so there's quite a lot of common ground, I would say, between you, me and Gary. But what we now need to get onto is his ideas for fixing some of these problems and whether they'll actually work.
[31:47]
Steph McGovern
Yeah, that's gonna be in the next episode with Gary Stevenson on the Rest is Money. Bye bye.
[31:52]
Robert Peston
Goodbye.

294. Gary Stevenson – Is being a city trader bad?

294. Gary Stevenson – Is being a city trader bad?

The Rest Is Money – Episode 294: Gary Stevenson – Is being a city trader bad?

Episode Overview

Key Discussion Points & Insights

1. Gary’s Background: Rags to Riches (03:59–06:50)

2. The City Trading Experience: Psychology of Wealth & Burnout (06:50–14:01)

3. Trading & the Financial System: Value to Society? (18:24–21:56)

4. Class, Opportunity, and Why Working-Class Traders Excel (26:36–27:33)

5. Wealth Inequality: Diagnosis & Debate (28:01–29:48)

6. What Next? (31:17–31:46)

Notable Quotes & Memorable Moments

Timestamps for Important Segments

Structure and Tone

Looking Ahead

The Rest Is Money – Episode 294: Gary Stevenson – Is being a city trader bad?

Episode Overview

Key Discussion Points & Insights

1. Gary’s Background: Rags to Riches (03:59–06:50)

2. The City Trading Experience: Psychology of Wealth & Burnout (06:50–14:01)

3. Trading & the Financial System: Value to Society? (18:24–21:56)

4. Class, Opportunity, and Why Working-Class Traders Excel (26:36–27:33)

5. Wealth Inequality: Diagnosis & Debate (28:01–29:48)

6. What Next? (31:17–31:46)

Notable Quotes & Memorable Moments

Timestamps for Important Segments

Structure and Tone

Looking Ahead