Sir: As Ken Livingstone points out (Review, 22 September), inflationary pressures are concentrated in the South-east.
These pressures could be addressed more directly rather than relying on an interest rate policy which hits the rest of the country harder than the South-east, and which is, therefore, directly counter to government policy of reducing poverty and exclusion across the country.
The Government could more directly reduce inflationary pressures in London. It could: reduce the extent to which government itself spends 20 per cent more per head in London than in the rest of the England; and reduce the funding gap between London boroughs and other large urban areas which helps London taxpayers to pay lower council taxes than elsewhere.
It could ensure that Lottery funds and other grants regimes are concentrated less in London; spread investment in major transport projects; ensure that those on marginally above-average earnings in London pay as much in combined income tax/national insurance contributions as those on above average earnings elsewhere (ie, raising the national insurance ceiling which is currently especially beneficial in London).
If government wants to reduce poverty and social exclusion it will also recognise that: there is still a shortfall of 4 million jobs, most especially in inner city areas; the most effective way of helping people on low earnings is to increase personal allowances; council tax is quite regressive in its current form, taking a higher proportion from low income households; there is a case for extra council tax bands and a revaluation to reflect property value changes since 1991.
Principal Research Officer
Corporate Policy Unit
Sheffield City Council