I am curious where you received your formal training in economics because most of what you propose is just flat out wrong.
And please stop taking personal credit for the performance of the UK economy and for Brexit.
The idea of "pension pumping' is a nebulous afterglow in the ether as compared to the massive structural systemic taxation issues inherent in the EU and the UK.
This is what happens with the VAT and with high income tax rates. I read a paper published by the Milken Institute that estimated the EU shadow underground economy to be valued at
$3T. Which sounds ludicrous.
https://www.milkenreview.org/articles/the-curse-of-cash
The US and Switzerland are thought to have the smallest shadow economies at 7.1 and 7.9% of GDP. There is a common thread among academics that more reliable data is available for the US economy courtesy of the IRS. Apparently EU Countries don't publish the results of tens of thousands of randomized tax audits. The OECD cites figures as high as 17% for VAT non-compliance in the EU.
Encouraging workers to take a second job with another company or in another line of work is counterproductive. Second jobs are almost always much lower paying and less skilled than a person's primary occupation. So - it sounds like you're asking an Air Traffic Controller working 40 hours per week to take
another less skilled much lower paying job in retail or in hospitality for the privilege of giving a pension manager discretionary investment funds? Have you considered the societal cost of having so many lower paying jobs being reshuffled? Why should an Air Traffic Controller take a second job and his marriage and family life suffer considerably just because he's taxed at an effective rate of 55%-plus? So a pension manager can pump? You're not creating more demand. You're not creating new technology. You're rearranging the deck chairs on the Titanic.
That's simply not realistic nor is it practical. Why not allow that Air Traffic Controller to invest more of his gross pay into a deferred tax structured pension plan of his choice? Let him or her work the career that they have developed expertise and satisfaction in.
In terms of the taxation exemption for supplementary income the anticipation is that people will move into doing other work or trade to gain the taxation exemptions, especially as the existing taxation is so high.
Governments don't innovate anything. A motivated private sector innovates.
Governments applying for Patents on intellectual property generated in the private sector
kills off any and all incentives for talented Engineers and Scientists. The Soviet Union had millions of University trained Engineers and Scientists. Literally. They invented the streetlight, the satellite, the laser and the modern computer. Didn't do much with it. And they still felt compelled to undertake industrial espionage on a massive scale in the West.
Here's the point: if you value innovation, you don't want the Engineer whose goal in life is to write the specifications to build a fence around a waste settling pond. You want the Engineer who dreams of getting bloody rich by developing a cell phone battery that can be charged, discharged, and recharged ten thousand times.
Technology creators and developers require an extensive University research system and an infrastructure path that financially incentivizes Engineers and Scientists. Why does almost everything we touch and do rely upon technology developed in Silicon Valley, California?
Because they've found a way to transform clever Engineers and genius Scientists into freaking Billionaires. Silicon Valley has a career path for that. The most innovative private sectors are the ones that encourage risk taking and capital investment in early and new technologies.
Encouraging an economy where over-taxed and stressed-out citizens work a second job in order to provide pension managers with surplus discretionary assets stimulates zero technology development. Such a foolish policy would create distortions and further dislocations in the job market and would force full time workers into underemployment or unemployment - and further stressing the public welfare system
by encouraging employers to cut full time employees and hire part time employees. It also makes a false assumption that pension asset managers will make investment decisions that are in the best long term interests of the Citizens and of the Nation.
The Norwegian and UAE Sovereign Investment funds have plowed a gazillion dollars into US technology Companies. Not noteworthy technology in Oslo or Abu Dhabi. A pension manager is not going to create technology.
There is also an opportunity for the government to develop 'International Commercial Innovation' by patenting new processes.
