The government is imposing an onerous and discriminatory system on taxpayers in London, according to a recent survey.
The survey by Williams de Broe into regional disparities in the cost of living has found that the starting point for income tax in London should be £1,550 higher than in the country’s poorest region, Northern Ireland, if cost of living is taken into account.
The starting point for the 40p tax rate should be £10,050 higher.
If regional house price variations were factored in, the inheritance tax rate of £275,000 would start at £189,644 in Scotland, but would not kick in until £397,358 in London where the housing market has exploded over the last decade.
The survey also found that it is 17.5 per cent more expensive to live in London than in the north-east of England. Williams de Broe, which is part of the ING Group, believes that this “explains why there is a chronic shortage of public employees in areas such as London and an excess of supply of recruits in others”. The bank criticises the government’s decision to subsidise the British regions so heavily.
“It remains an interesting issue why regions, where well over half local gross domestic product is received as a free transfer from outside, such as the former East Germany or large parts of northern Britain, never appear to become self-sustaining ‘growth poles’; while places where the state has effectively collapsed, such as Lebanon in the 1970s or Cyprus after its partition of three decades ago, appear capable of a surprisingly dynamic performance.”