By Robert Watts, Whitehall Correspondent, Sunday Telegraph
Northerners should be paid lower unemployment benefits and receive a less generous minimum wage than people in the south, according to a study.
The controversial report argues that Gordon Brown's "unfair and intrusive" tax and benefits are fuelling a "dole culture" in the north, while penalising more productive southerners who have to suffer higher living costs and house prices.
Using a raft of official labour market and price data, the Economic Research Council's study says Londoners should get a minimum wage of £6.90 an hour, compared with the current rate of £5.35.
By contrast, the minimum wage for workers in the north-east should be slashed by 57p an hour to just £4.78, the think tank's study claims. Substantial cuts should also be made to the minimum wage in Yorkshire (down to £4.95 an hour), Northern Ireland (£4.80) and Wales (£4.84), it suggests.
The report, by Prof David Smith at the University of Derby, also argues that having one national level of unemployment benefit removes the incentive to work in parts of the country where wages are lower.
Prof Smith, born and raised in Leeds, said: "If you are in London benefits are a very poor substitute for work. If you are in the north-east benefits are a very good substitute for work - so you tend to get far more people on benefits up there." "Britain's tax and benefits system has got more unfair over the past 10 years. The minimum wage for Londoners is effectively a joke - laughably low."
The paper calls for Britain to adopt a system similar to those in Switzerland and the United States, which allow local authorities to set benefits, the minimum wage and the salaries of public workers.
Northerners should be paid lower unemployment benefits and receive a less generous minimum wage than people in the south, according to a study.
The controversial report argues that Gordon Brown's "unfair and intrusive" tax and benefits are fuelling a "dole culture" in the north, while penalising more productive southerners who have to suffer higher living costs and house prices.
Using a raft of official labour market and price data, the Economic Research Council's study says Londoners should get a minimum wage of £6.90 an hour, compared with the current rate of £5.35.
By contrast, the minimum wage for workers in the north-east should be slashed by 57p an hour to just £4.78, the think tank's study claims. Substantial cuts should also be made to the minimum wage in Yorkshire (down to £4.95 an hour), Northern Ireland (£4.80) and Wales (£4.84), it suggests.
The report, by Prof David Smith at the University of Derby, also argues that having one national level of unemployment benefit removes the incentive to work in parts of the country where wages are lower.
Prof Smith, born and raised in Leeds, said: "If you are in London benefits are a very poor substitute for work. If you are in the north-east benefits are a very good substitute for work - so you tend to get far more people on benefits up there." "Britain's tax and benefits system has got more unfair over the past 10 years. The minimum wage for Londoners is effectively a joke - laughably low."
The paper calls for Britain to adopt a system similar to those in Switzerland and the United States, which allow local authorities to set benefits, the minimum wage and the salaries of public workers.
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