So the plan is that government, civil service and state sector jobs – teachers, firemen, police and the like will get less pay when employed in areas where living costs are lower. Sounds like a fair idea, but there is no point in going off half baked, it must be taken to a full and fair conclusion.
So MPs representing those less affluent areas will get less pay, and of course a lower rate of allowances because their rural home is cheaper to run? Hmm.. And this will apply as equally to the top level of council, NHS, education and quango management as it does to the lower orders?
And to be fair why should people in those less affluent and cheaper regions pay proportionately less income tax. They aren’t earning as much so income tax allowances need to be reduced such that a median salary has the same proportion of allowance and pays the same proportion of income tax. Inheritance tax too, there is no reason why someone in Little Mudford upon Humber should inherit a 5 bed house free of inheritance tax while a Londoner gets caught over a 2 bed terrace. This leaves them worse off of course, but we haven’t balanced the whole system yet.
All sales taxes, licences and duties are set to London values, clearly this is inappropriate for outlying regions with lower GDP and earnings. Thus to be fair VAT rates should reduce in the poorer areas as should duties on fuel, cigs and alcohol. Council fees and charges, H&S fees, licence fees, road tax etc must all be tapered to match the same proportionate amount when compared with median salaries.
My rough solution then is for the London and South East area to stay as it is. At a distance of 50 miles out all government salaries, tax allowances, VAT rates and duty rates should reduce by about 5%. Another 5% at the 100 mile point, the 150 mile point etc. Thus somewhere around Manchester, 200 miles out, a £50,000 London salary becomes £40,000. But Petrol will be 20p per litre cheaper, Vat will be only 15%, and all government and Council costs and charges will be 20% cheaper.