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Immigration in the Post-Brexit World

by John Brian Shannon

The days of a foreign power deciding how many people can live in the UK are rapidly closing. On any date past March 29, 2019 the UK government could decide to radically alter the future of Great Britain. And that’s a very good thing.


The Days of Unrestricted Immigration to the UK Are Soon Over

Until now, the UK has been forced to accept both new residents and transients who easily pass through the EU’s porous border control system called the Schengen Area (visit here to see a list of Schengen countries) where anyone from anywhere can simply walk across the border and are rarely challenged or identified by authorities.

Which is one thing if your country is on the outer rim of the Schengen Area and those undocumented people are walking through your country to get to another country; It’s quite another if your country is their destination.


8-Million Immigrants Later; UK Police & Security Services Know Surprisingly Little About Who Those Immigrants Are

And that’s the reason the UK has 8-million (mostly unknown) refugees and economic migrants. It’s a wonder there hasn’t been 10-times as many terrorist acts! A million thanks to the overworked police and to the security services who surely have more pressing matters to attend to, for keeping 99.999% of Britons safe from harm.


The Hidden Cost of Unregulated Immigration

Regardless, there is still a cost to all this additional policing and security work — whether that cost is under-serving other police and security files, or devoting more of their police and security service budgets to identifying and tracking imported (potential) problem people.

Yet the majority of refugees and economic migrants are decent people who want nothing more than to find a better life (in our UK that our forefathers built and fought for) and are prepared to work hard to accomplish that goal. But many aren’t.

And we don’t know who is who in that opaque world and we may never know as few have been vetted to a standard where we even know their names, their criminal background (if any) and other important information about them like their level of education, history of exposure to communicable diseases, extreme religious views, etc.


Getting Selective with UK Immigration

Once the UK regains control of its borders, the country can be very selective of who it allows into the country, but if a person lacks important inoculations like Chickenpox (varicella), Diphtheria, Haemophilus influenzae type b (Hib), Hepatitis B, Influenza, Measles, Meningococcal meningitis, Mumps, etc., (it’s a much longer list than that, FYI) those inoculations could be administered at any UK port of entry to protect that person and simultaneously protect all Britons from some nasty foreign diseases.

It’s far less costly in lives and in pounds sterling to provide those inoculations in advance than to allow the next contagious virus to infect 100,000 people because someone didn’t get £40 worth of vaccine at the border.

Each UK port of entry should have enough Doctors and Nurses to administer such vaccines to Britons at no cost (as infected people may unknowingly carry viruses into the UK population when returning from countries where the Zika Virus etc., are prevalent) and for the very same reasons, such injections should be free (and required) to refugees and economic migrants at every UK port of entry.


Proper Police Screening post-Brexit

With proper vetting procedures in place, the UK will never again import another terrorist or criminal entity if every refugee and economic migrant is required to produce a paper copy of a criminal records check from their country of origin as they enter the UK.

To speed throughput times at UK ports of entry, the Border Force should create a secure section on their website to accept digital copies of such documents to be submitted in advance of travel to the UK.

Such documentation should be viewed online by Border Force officers prior to each plane landing or each ship docking at any UK port of entry — then that person can hand the official paper copy to the border guard as they pass through the border control turnstiles.


Choosing the ‘Right’ Immigrants

In some years, the UK may find it has a shortage of History professors, while other years it may have a shortage of farm labourers (for two examples) but when the UK government regains control of immigration it can decide in advance how many of each to let into the country.

In other years it may be the case that the UK requires more engineers, General Physicians or construction workers; But when you’re in full control of your immigration you can allow exactly the number of people into the country every year that you need. And none that you don’t.


Seasonal Foreign Workers Should be Pre-approved by the Border Force and Should Always Originate From Commonwealth Nations

Which is why the UK government should create a special category for seasonal farm workers so they can be efficiently notified by the Border Force website as soon as they are required for the season. (‘It’s time to pack your bags for your flight to Britain!’)

Such seasonal workers should be required to pay an annual £100 application fee and provide a digital copy of their criminal records check to the Border Force in advance via a secure website set up for that purpose.

If they don’t get hired, their deposit would be returned to them at the end of the year. If they are hired by their UK employer permanently, they would pay £100 per year thenceforth.

Once the Border Force has been notified by the relevant UK government department to allow (for example) 58,750 pre-approved seasonal workers into the country, they can easily accomplish this task by consulting the Commonwealth master list.

Large farm operators may decide to pay the £100 application fee on behalf of each person they hire from abroad and may also assist them in other ways such as picking them up at the airport and transporting them directly to their accommodations on the farm, etc.

This sort of ‘sponsor’ relationship between workers and their UK employers should be strongly encouraged by the government as it will dramatically minimize false applicants — those who never report to the farm and then go on to (unknown) activities in the UK.


All Other Foreign Workers Should be Pre-approved by the Border Force and Should Always Originate from The Commonwealth and the U.S.A.

To assist the UK economy during periods of peak manufacturing, or when the service sector requires more workers than are available in the UK, Britain’s businesses could draw from a pre-approved Border Force list of up to 1-million potential workers.

Pre-approved in this case means that such persons have proved their interest in working in the UK by prepaying their £100 annual fee to the Border Force, and have provided a recent copy of their criminal records check to the secure area within the Border Force website.

If they don’t get hired, their deposit would be returned to them at the end of the year. If they are hired by their UK employer permanently, they would pay £100 per year thenceforth.

Note to busy employers: It doesn’t mean they’ll automatically be appropriate to the particular job you want them to do or that the Border Force has their CV digitally stored on the Border Force website — but it will mean they aren’t a criminal or a terrorist and that they’ve taken the right steps to ensure they’re on the pre-approved list to work in Britain.

As soon as your telephone or Skype interviews are concluded, your new employee could be on the job in one day as all government paperwork would already be done months or weeks prior to your call.

Once supersonic airline flights resume between London and New York, your new employee from America can arrive before noon on the same day you approve them, and your HR department can give them the full orientation of your London office building that afternoon so they know where to park their rental car the next morning.

The UK would be the first country in the world to utilise such ‘Just In Time Labour’ in the same way the manufacturing sector has used ‘Just In Time Delivery’ to such good effect since 1990.


The Only (New) Immigrants to the UK would be Pre-approved by the Border Force and by Employers

Now How do You Feel About Immigration?

Isn’t that a better solution than having millions of undocumented people streaming into the UK sans job offers, proper inoculations, criminal records checks, and without any purpose in life other than to escape the problems in their own country?

Even if the number of annual immigrants to the UK were to increase post-Brexit (it won’t) the total number will be less relevant overall — as every one of them will be pre-approved and invited into the country by their employers — rather than millions of them just showing up and expecting the same benefits that British taxpayers are entitled to via their decades of annual tax payments.

After March 29th 2019, the UK will have entered the 21st-century where people will apply to reside in the UK and their ability to work in the country will be based on their merits rather than on their ability to run across a border.

In the future, immigrants will be perceived to be a welcome addition to the UK instead of being perceived as a potential security threat.

Which will result in a fundamental change in how Britons feel about immigrants in a general sense, and how they feel about their foreign co-workers and neighbours.

Welcome to the 21st-century!

Why the UK Should Match Canada’s 15% Corporate Tax Rate

by John Brian Shannon

Canada’s corporate tax rate remains at 15% and that low tax rate was one of the reasons the country essentially cruised unharmed through the financial crash of 2008 and its bloody aftermath.

Throughout the global financial meltdown Canada easily led all G7 countries in growth (although Canadian growth was curtailed as compared to pre-crash projections) and the country didn’t need to increase taxes, nor make major fiscal or monetary adjustments during that period.

Corporate Income Tax Rates for Canada in 2018.

Corporate Income Tax Rates for Canada in 2018. For active business income — includes all rate changes announced up to June 15, 2018. Information courtesy of www.EY.com

Although the country isn’t thought of as an offshore tax haven by any stretch, having a 14.5% corporate tax rate during the global economic crisis (it’s since risen to 15%) meant the country avoided the exodus of capital that other nations experienced.

That reasonable corporate tax rate as much as any other factor helped Canada to survive and thrive in the face of one of the most damaging economic meltdowns in modern history.

Money fleeing the country to low corporate taxation destinations is NOT what the UK government needs any time over the next decade.


Will There be Another Recession?

Of course there will be another recession. Recessions in Western countries occur every 25-years on average although unexpected economic shocks have been known to occur. Just because the average interregnum is 25-years, doesn’t mean recessions can’t also happen randomly — which means that the UK needs to begin playing it smart, now, to better survive the next global downturn.


Why Match Canada’s Rate?

Canada’s corporate tax rate just happens to fall within an economic ‘sweet spot’ — high enough that it doesn’t get named and shamed as an offshore tax haven (which tend to get a lot of bad press when a recession is on) yet is close enough to other developed nation corporate tax rates that it doesn’t get a bad reputation.

All else being equal, you want to go with what works. And Canada’s low corporate taxation plan worked wonders to help the country coast through the last recession — and it performed even better than expected, pre- and post-recession.

Sure, there were nervous moments here and there, nobody denies that. But that 15% rate combined with a steady hand on the economic tiller by Mr. Mark Carney then-governor of the Bank of Canada (now governor of the Bank of England) and the country under the steady leadership of (then-Prime Minister) Stephen Harper added gravitas and confidence to the Canadian economy at a time it was needed.

That’s all it takes to survive and thrive in recessionary times, folks.


Philip Hammond’s Next Budget

UK Chancellor of the Exchequer Philip Hammond should match Canada’s corporate income tax rates exactly, and publicly commit to that at Spring Budget 2019. Or even better, in Autumn Budget 2018.

Due to Brexit there is a real need to write both a spring and autumn budget each year, at least until the 2-year implementation period is complete.

Lowering corporate taxes could mean less revenue for HM government. That’s a possibility. But there are positives to a lower corporate income tax rate for the UK, particularly during the present economic uncertainty:

  1. More companies will move their headquarters to the UK to obtain a better corporate tax rate.
  2. More UK companies will decide to stay in the UK rather than leave it for (perceived) greener pastures during this period of economic uncertainty, although they could well have plans to return 5-years on from Brexit. (But can you count on that?)
  3. UK-based companies will have more money to invest in their UK operations, to increase non-labour purchases, and perhaps expand their existing factories, facilities, or number of retail outlets.
  4. UK companies that presently fear Brexit may hurt their business may find that as the UK corporate income tax rate falls to 15% it gives them a competitive advantage of 5% they didn’t have prior to this (proposal). Less fear and better after-tax profits. ‘Gotta like that’ said every CEO ever.
  5. Instead of the government needing to stimulate the economy, increased spending by UK companies flush with newfound cash will help to stabilize the economy now and through the 2-year implementation period via increased spending and hiring.
  6. Hiring more workers with a 5% tax savings means more revenue for HM government — as many of those workers will earn enough to pay an average 45%-55% personal income tax rate.

That’s just a short list of the benefits of lowering the corporate income tax rate to 15% and if the tax reduction announcement is timed correctly HM Revenue and Customs shouldn’t suffer any loss of revenue — and it’s possible that HMRC may receive slightly more revenue courtesy of additional personal income tax contributions if companies go on a hiring spree with their saved money.


Here’s a bonus graphic to show *what can happen* when you cut the UK corporate income tax rate…

UK Corporate Income Tax Rate drop

UK Corporate Income Tax Rate drop increased tax revenue by 50% from 2010-2016. Image courtesy Daily Mail.

Why the UK Should Tax Robots Post-Brexit

by John Brian Shannon

One point that never seems to get enough attention in the UK and other Western democracies is that there are always more job-seekers than jobs available.

It doesn’t matter which country, which decade, which party is in power; There are always more people looking for work than there are jobs available and it remains a permanent condition in Western countries, much like the cosmological constant that defines the universe remains a permanent condition.

Telling people to “Get a job!” to solve their poverty issue or quality of life issue isn’t the answer to handle a force majeure like an eternal shortage of jobs. If everyone who could be employed followed that advice there would inevitably be 10% of the population who would miss out on a job simply because there isn’t the level of demand necessary to employ everyone who wants to work (or who needs to work to pay the bills) in any Western country. (Remember, official unemployment figures show only the number of people receiving unemployment insurance payments, not those who’ve exhausted their UI benefits and still want to work, nor do official figures show those who gave up looking for work and returned to college, or became a homemaker or unpaid intern, etc. There are significant numbers of these people in every Western nation)

Indeed, our Western economic model is predicated on human redundancy which works to keep significant downward pressure on wages, and that helps business to control their labour costs and thereby contributes to the bottom line.

It’s not that companies are evil entities, everything they do in this sphere is legal and is considered normal practice in our economic system. So, if you’re blaming industry for this state of affairs, I’m sorry, you’ve missed the point.

Government regulation over many decades have produced this result and it’s only government regulation that can solve or mitigate the consequences of this unfortunate situation, which has evolved it must be said. Nobody would create such a system from scratch. The system has evolved in piecemeal fashion.

Yet as creaky and wobbly as it is, it works. But it’s costly and it underperforms compared to what could be done.


The Robot-Tax Tour!

With all of that in mind, let’s go on a little tour to show us what rolling all social welfare programmes into one streamlined entity can do for the UK and it’s citizens, and what a low-ish tax on robots could do to pay for that all-in-one social care system:

  1. Imagine a low-ish tax on robots in the UK that accumulates enough annual revenue to pay for the country’s welfare system, disability benefits system, Universal Credit system, is able to top-up the monthly income of poverty-stricken senior citizens to a minimal level, end the need for food banks, solve homelessness and homeless-related costs like policing, court, and incarceration, and do away with the need for many overlapping social welfare programmes at all levels of government.
  2. It’s important to remember that all these programmes are already paid for by various levels of government and that I’m merely proposing to roll all of them together into one super-streamlined programme and have a ‘robot tax’ pay for it.
  3. Let’s also say there is massive duplication of services (there is) in all of these present-day programmes and that such duplication is costly to the various levels of government and to the taxpayer who pays every penny of it through taxation.
  4. The prime beneficiaries of all that paying seems to be industry, which enjoys the benefit of a labour pool permanently mired in a state of ‘job insecurity’ that works to keep workers ‘hungry’ for work and working for wages lower than would otherwise be the case. Shareholders around the world admire your contribution to their annual dividend payments!
  5. At present, robots aren’t taxed in the UK. Yet, these job-stealing marvels produce many times the output of a human being. Which means that if “Robert the human” produces 100 widgets per day, a robot can produce 1000 widgets per day. This means that “Robert” and 10 other people like him can be replaced by ONE ROBOT. But that statistic doesn’t tell the whole story because ONE ROBOT can work much faster than “Robert the human” and it can work for the full 24-hours and produce 10,000 widgets daily; Meaning ONE ROBOT can replace 1000 “Roberts”. The ratio then, is likely around 1/1000. Each robot replaces 1000 workers. See the future more clearly now?
  6. So, if one robot can replace 1000 workers and thousands of robots are going to take almost all manufacturing jobs, almost all agricultural jobs, almost all call centre jobs, and almost all clerical jobs, how many people will become “redundant” by 2033? And the answer according to the highly respected PwC is; 50% of all workers.
  7. Yet, even with those changes on the horizon (remember, this is already happening, it isn’t going to suddenly start in 2030 and be completed by 2033) it’s happening now and not one word about it has been uttered by world governments. Or maybe they know enough to keep quiet about the fact that EACH ROBOT can replace 1000 workers, thereby improving profits for companies. And as long as taxpayers aren’t rioting about it then maybe taxpayers finally accept that they exist, in part, to subsidize corporations.
  8. Another major consideration is that for each 1000 jobs replaced by ONE ROBOT the government is losing the income tax revenue generated by 1000 workers! The government must also pay former workers unemployment insurance payments or Universal Credit / welfare payments, or pay them via other anti-poverty schemes. Perhaps politicians think taxpayers don’t mind paying for all those costly and sometimes overlapping social programmes to support people whose jobs have been replaced by technology? That’s in addition to paying mega-millions to cover the costs of homelessness (in cases of long-term unemployment) and the crime / policing / court costs / incarceration costs that are associated with homelessness, illicit drug use, and other medical and mental health related costs. To put numbers on only a small part of this problem, each UK prisoner costs the taxpayer £81,000 per year to house + free medical + free dental + free prescription medications. Wouldn’t you rather have it that robots paid poverty-stricken people £13,056/yr + free medical + free dental + free prescription medications to help prevent them from ending up in prison in the first place?
  9. It’s not about being a Luddite! It’s about helping industry hire as many robots as they want (guilt-free!) yet taking care of living, breathing human beings in the meantime. That way, UK businesses can thrive as never before, hire only the humans they need, and still have a large pool of human labour to jump-in on an as-needed basis to fulfil those functions that robots can’t easily perform, such as customized or highly specialized orders.
  10. By rolling all UK anti-poverty programmes into one streamlined single-payer system and paying for it via a reasonable tax on robots, human workers can continue to live, eat, and remain housed (and remain ready to work on an as-needed basis) and UK corporations can begin to reap unprecedented profits!

Tax robots in the UK.

2018 looks to be a good year for world’s top industrial robotics companies, with many of them innovating and simplifying the industry. Industrial robotics services are also benefitting, expecting an incremental growth of well over $4 billion by 2021. Image courtesy of Technavio.com


ONE SYSTEM INSTEAD OF MANY

How to accomplish all of that? By switching all anti-poverty programmes in the UK into one streamlined single-payer system that pays every unemployed adult £1088/mo + free medical + free dental + free generic prescription medication. (This option is limited to those earning less than £13,056 per year from all sources, according to their latest income tax return)

LOW-INCOME UNEMPLOYMENT INSURANCE RECIPIENTS PAID BY THE SINGLE-PAYER SYSTEM

Due to previously working at a low wage job, a person receiving unemployment insurance payments may receive less than £1088/mo. from their unemployment insurance plan, therefore in such cases the single-payer administration would simply ‘top-up’ their monthly payment to £1088/mo. + the healthcare benefits listed above.

It would become one step easier by having the single-payer assume full responsibility for payments to that person and the unemployment insurance administrator would simply reimburse the single-payer administration the monthly amount they would’ve paid to that unemployed person anyway. (Limited to unemployed adults earning less than £13,056 per year from all sources, according to their latest income tax return)

LOW-INCOME SENIOR CITIZENS PAID BY THE SINGLE-PAYER SYSTEM

To lift senior citizens out of extreme poverty and to allow them to live a more dignified lifestyle (in return for helping to build the great UK we see today!) and be better positioned to assist younger members of their family, any senior who reports less than £13,056 annual income would have their monthly income ‘topped-up’ to £1088./mo and receive the same benefits as anyone else on the single-payer system. (£1088/mo. + free medical + free dental + free generic prescriptions)

Again, a government or private pension plan is already paying those seniors a predetermined monthly amount. All the single-payer system would do is ‘top-up’ the income of seniors to the £1088./mo (plus the benefits above) and those pension plans would simply transfer those payments to the single-payer administration which would merely ‘top-up’ the difference in the monthly amount and pay the senior directly. (Limited to seniors earning less than £13,056 per year from all sources, according to their latest income tax return)

UNIVERSAL CREDIT AND OTHER ANTI-POVERTY PROGRAMME RECIPIENTS PAID BY THE SINGLE-PAYER SYSTEM

Instead of the many overlapping and inefficient organizations trying to cope with the needs of poverty-stricken UK adults, the single-payer system can work more efficiently to meet the needs of those who otherwise may fall into ill-health, depression, homelessness, crime, or any other poverty-related condition that results in real costs to the UK government and society in general. Those costs are already being borne by UK taxpayers along with a perceived loss of personal security and mobility freedom among the UK population.

All of these overlapping and inefficient social welfare programmes should be ended by 2020 and replaced by a streamlined single-payer system based on the social insurance number and the individual’s latest income tax return. This is commonly known as a ‘reverse income tax’ among economists. Every UK adult who earns less than £13,056 per year (from all sources) would automatically be enrolled in the single-payer system and begin receiving payments the same month they file their tax return.

When every unemployed adult or retired Briton is earning a minimum of £13,056 per year + free medical + free dental + free generic prescriptions (using the reverse income tax/single payer model) AND all of it is paid for by robots that create 1000-times more wealth for their companies than human beings will ever create, that will be the day that the UK scores the biggest win since the National Health Service was founded.

Among the ‘wins’ of the reverse income tax/single payer model would be the end of homelessness and its associated crime component and a corresponding reduction of property insurance rates, and the end of wasteful, inefficient and overlapping anti-poverty organizations (both public and private) for just a few examples of the benefits of the single-payer model.

And all of it paid for by a moderate tax on robots and other job-stealing technologies that (each one of them) can do the work of 1000 human beings — which means that even with the ‘robot tax’ UK businesses will profit as never before!

It would create a better future for individual Britons, for UK business and their bottom line, and for every level of UK government when compared to allowing the status quo to continue unchanged.


Related Articles:

  • New study shows nearly half of US jobs at risk of computerization (University of Oxford)
  • Will Robots Really Steal Our Jobs? (PwC)