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None the less, I am grateful to my hon. Friend for her valid point Madam Deputy Speaker. The local income tax might relieve the pain for some suffering groups but it would do so by transferring it to others who would suffer just as badly and are the very people whom we want to help—those who are just starting on the property ladder, are not on particularly high salaries and may find it hard to make ends meet.
The other problem with the local income tax is that of equalisation across the regions. Income levels are very divergent in different parts of the country, and bodies such as the Chartered Institute of Public Finance and Accountancy warn that a local income tax would place greater demands on the need for resources equalisation between areas. One of the big injustices of the current system of local government funding is that Government grants lead to a great deal of reallocation of resources between different parts of the country, and that would have to increase under a local income tax.