The call by a group of economists for an end to national pay rates for the public sector is entirely understandable. A young GP on £100k hanging his shingle in a market town in the gorgeous north-east countryside has the prospect of cheap houses, a lower cost of living, decent schools and a far better life quality than if he practised in Haringay, even with a couple of grand London weighting. An acquaintance who formed part of the move of the NHS HQ from London to Leeds swapped an 'artisans cottage' (a two up two down to the rest of you) in Muswell Hill for an elegant five bed Edwardian villa. When other costs and prices vary considerably across the country, there is little reason for public sector wages not to do so.
But if you apply the argument to the public sector, it must also apply to the minimum wage. Why should a struggling pub in Middlesbrough have to pay the same hourly rate as one in Sevenoaks? And once you've removed these market distortions from the labour market, what about specific duty rates? (ad valorem taxes already reflecting price variability).
The suggestion has not been made by Cameron's government, you will note. In fact they will be opposed to any such move - to anything that removes powers from the metropolitan centre and devolves it - but since Labour and the LibDems have already signalled their opposition, all Cameron has to do is mutter anodyne and neutral platitudes and ignore the recommendation. Once the genie of tax-and-spend decisions is let loose from its Whitehall bottle, there's no telling what other functions may follow.
There is a cogent argument for some form of wealth transfer from the wealthiest regions of the realm to the poorest; its morally proper, it strengthens the Union and it prevents large movements of people. But distorting factor markets isn't the way to do it. Bradford's new city centre streetscape, paid for by the City of London, is the sort of thing that's needed; it increases local business confidence and investment decisions, increases local GDP as people find the area more pleasant to be in and fosters proper civic pride. And if the lucky locals can enjoy a pint for half the price of one in Covent Garden as they enjoy the autumn sun, all the better.