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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)

The UK Housing Market: Post-Brexit

by John Brian Shannon

One of the conundrums of EU membership for the UK has been the mass influx of people from the continent since 1993, but especially from 1998-onward. Some 8-million immigrants now call the UK home — of which 3.3-million are EU citizens who moved to the UK to work or study.

Suddenly dumping 8-million people (or even 3.3-million Europeans) into a country puts an unprecedented strain on the country’s housing market. Since 1993, property prices in the UK have risen to become some of the highest priced property on the planet sometimes pushing native Britons aside and into high-priced rental accommodations.

Although these mass migrations began in 1993 when the UK joined the EU (bereft of any referendum) the population of the UK had been holding near 57.7-million with almost no annual growth in the UK population. In recent weeks the population of the UK has surpassed 66-million. It’s easy to see from this calculation that the UK-born population only increased by 1-million from 1993-2018, while the balance of the country’s population increase (8-million) occurred as a result of immigration.

Therefore, is it any wonder that house prices are expected to fall once Brexit occurs and the UK government is again in charge of how many immigrants it lets into the country? Certainly the demand for housing and services will fall to equilibrium levels as supply once again approximates demand.


Is it Possible to Determine Housing Policy Before Immigration Policy is Decided?

In a word, no.

As long as unrestricted immigration continues any housing policy is doomed to fail no matter how well-intentioned. When numbers of immigrants rise or fall by the hundreds of thousands per year trying to fine-tune the UK’s housing policy is impossible.

The same holds true during the 2-year Brexit implementation period; Immigrants living in the UK may decide to return to their countries of origin at a rate the UK government won’t realize until well after it has occurred.

Assuming the government places a cap on immigration (of say, 200,000 per year) during the 2-year implementation period… it still leaves the variable of how many immigrants will leave the UK post-Brexit.

As you’ve correctly deduced from reading the above, TWO VARIABLES have been at play in the UK’s housing/immigration market since 1993. No wonder there’s been chaos!

Post-Brexit, there will only be one variable — and that one variable could still be a large factor in this equation — which is why immigration levels should continue to remain high-ish to level-out the expected crash in housing demand that will negatively impact house prices and rental rates.

In short, the UK government’s approach must be to utilize immigration levels as a lever to facilitate a stable housing market otherwise housing demand will crash and property values will fall precipitously triggering a mini-recession in the UK.


What is the Best Rate to Taper UK Immigration?

Last year, the UK allowed over 300,000 immigrants into the UK (great for UK businesses that depend on cheap labour) but it puts severe demand on housing and leads to vastly overinflated house prices.

Were the UK to drop immigration down to zero in 2020, not only would demand for new housing crash, it could also happen that large numbers of immigrants may leave the UK. How many? No one could say. It could be thousands, hundreds of thousands, or even millions.

How can you create a housing policy when your assumptions may be off by millions of people? You can’t.

Therefore, whatever changes there are to be in UK housing policy for the next 5-years, it will be best that the government make only incremental adjustments to immigration numbers, net immigration numbers, and in housing policy — adjustments that strongly adhere to whatever housing market situation develops, as it develops.

Allowing housing prices to drop precipitously (even while recognizing those prices are at present vastly overvalued and must eventually return to reasonable levels) could wreak havoc with the UK housing market, with people’s lives, and with the UK economy.

It’s a rare occurrence when policy must follow an evolving situation instead of leading it.

UK immigration policy that follows evolving housing market conditions will allow allow a gentle and ongoing reduction in the outrageous housing prices in the UK’s major cities to something approximating a normal housing market.

Preparing for a Post-Brexit UK: Transportation

by John Brian Shannon

So many people are caught up in the present Brexit moment they forget there will be life after the official Brexit date of March 29, 2019.

With that in mind, policymakers must begin to focus on the problems that will still be with us in the immediate post-Brexit timeframe.

Q: Why can’t they do that now?

A: Because their hands may be tied by present EU regulations, or everyone is waiting to see what kind of Brexit deal the UK gets, or they’re busy advising business groups and the government how to maximize their Brexit advantage.

So let’s begin the post-Brexit era by solving problems we know will still remain after Brexit day — and use solutions that aren’t presently viable due to EU regulations or norms.


Ask Any Londoner and They’ll Tell You their Worst Daily Problem is City Traffic

Actually, the worst problem Londoners face is the weather. But the City’s notorious traffic congestion starts early, the roads become increasingly packed with vehicles, air pollution levels skyrocket, life occasionally becomes dangerous for pedestrians, and it wastes millions of hours of time every year.

Not only London, but Manchester, Birmingham, Belfast, Edinburgh and other UK cities force drivers to spend countless hours stuck in traffic and millions of gallons of petrol are wasted annually as cars and lorries inch along the country’s congested roadways.

Of course nothing can be done about it — because if something could be done it would’ve already been done! Right?

Except there is a way to decrease traffic congestion: Theresa May’s first legislation following Brexit should be to ban all lorries from operating within cities of 1 million inhabitants or more — from 6:00am until 6:00pm every weekday.

Lorries could still cross from the continent on ferries or via the Chunnel, operate in the countryside, passing through towns and smaller cities and arrive at (for example) London’s Ring Road anytime after 6:00pm each weekday. Yes, they’d need to obtain ‘the key to the shop’ to unload the shipment at ‘Mom & Dad’s Deli’ or perhaps drop an appropriately sized (and electronically locked) crate full of goods on the loading dock.

It’s a scheduling issue for freight companies; As long as their large vehicles are parked or otherwise off the UK’s major city roads by 6:00am each weekday they won’t incur automatic/electronic fines and they’ll be able to go on with the rest of their day as normal.

Trash haulers, freight delivery, fuel trucks and other transporters will simply adjust their schedules to comply with the weekday hours ban.


List the of Benefits of Such a Plan!

Think of Britain’s major cities free of lorries within their city limits from 6:00am until 6:00pm every weekday:

  1. Less traffic, less traffic noise, less congestion and less gridlock.
  2. Increased parking availability.
  3. Better visibility for cars, cyclists and pedestrians equals fewer accidents and lower NHS spending.
  4. Lower air pollution levels on weekdays result in fewer respiratory emergencies, thereby saving the NHS budget millions annually and helping the UK to meet its international clean air commitments.
  5. Although lorry drivers would work different hours, they’d have far less traffic to deal with between the hours of 6:00pm and 6:00am, their big rigs would have acres of room to maneuver around in and they’d easily find parking to offload or load their goods.
  6. An automatic/electronic fine for lorries that enter the city during banned hours of the day could go towards building major lorry parking/queuing areas on the outskirts of major cities. Perhaps a great place to set up coffee shops and motels dedicated to truckers so they can grab a few hours sleep before their afternoon shift/night shift begins? And (while they sleep during the day) have their big rig repaired at a shop within the secure ‘Trucker Zone’ area. If so, I want to invest in those dedicated Trucker Zones — talk about having a captive audience! — the lorries can’t leave until 6:00pm and if they do they would automatically incur a £100 fine as soon as they pass the “City Limits” sign a few feet down the road!
  7. Trucking companies could arrange to have a fully loaded lorry parked and ready to roll at such ‘Trucker Zones’ for each night shift driver to pick up at the beginning of his/her shift and provide a safe place to drop it off in the morning.
  8. Lorry drivers should gain free and hassle-free parking anywhere in the city between 6:00pm and 6:00am and receive special consideration from police in case a lorry driver happens to park in front of a ‘No Parking Zone’ for the few minutes it takes to deliver the load. As hardly anyone is around in the middle of the night and there’s no traffic, why make an issue of minor parking rules?
  9. Lorries leaving major UK cities at 6:00am could pull into the ‘Trucker Zone’ nearest them at the end of their shift, leaving the lorry there for the daytime driver to carry on with the day shift’s rural deliveries/pick ups.
  10. National productivity could be enhanced by requiring lorries to remain outside city limits (or parked within the City) during the daytime hours, giving them free run in cities until 6:00am.
  11. Cities might notice more lorry traffic at the weekend. However, the vast majority of cars aren’t on city roads during the weekend so lorry traffic won’t be too onerous.

Certainly, traffic and congestion in the UK aren’t the fault of the EU, but in the post-Brexit timeframe UK regulators will have a freer hand to solve many issues. Traffic congestion is a problem that affects everyone whether you drive a car, ride a bus, pedal a bike, own a business, or are a tourist who wants to get from tourist site “A” to tourist site “B” and not spend the whole day at it.

Cities depend upon free movement of goods and people. Moving to a two-track plan to obtain better use from city roads could radically change how we use cities. And the day after Brexit is as good a time as any to begin making the best use of those valuable assets.


Image courtesy of motortransport.co.uk