Re: Another advantage of being a contractor
"Many continental countries allow this to be done by employees anyway. So those French colleagues are not only paying about one third of your travel costs, they can charge it against tax, too."
Dutch colleagues get 100% of their travel costs (public transport) paid for(*). The alternative is Amsterdam and Rotterdam turning into something worse than London in terms of both population density and congestion. This way people are spread along the Randstad and it's generally a pleasant country to live in.
I used to commute from Rotterdam to Amsterdam every morning on well-run trains. The UK equivalent would be a catchment area from Hastings/Brighton/Portsmouth to Nottingham/Birmingham/Kings Lynn/Bristol, but for everyone working in London, not just the upper middle classes.
The side effect of this policy is that businesses have stopped heavily clustering around the major cities and are also spread up and down the Randstad
The UK's transport and taxation system is bass-ackwards in a huge number of ways and working tax credits are one of the more stupid examples - it's far more efficient to let people keep more of the money they earn than to make them pay tax, handle it internally and then pay it back out again.
(*) There are allowances for company cars but these are taxed heavily and road taxes are a killer too. A public transport season pass allows unlimited travel outside of working hours and gets covered by the company, whereas every non-work km in a car is taxable as a perk.
As far as Tim's proposal goes: As others have pointed out, it would be a return to policies of the 18th, 19th and early 20th centuries. One of the defining characteristics of the middle 20th centuries (up to ~30 years ago) was a decline in inequity.
Since Reganomics and Thatcherism became the governing policies, the gap between rich and poor has been widening ever more quickly. Such gaps tend to lead to popular uprisings, which means they're not sustainable long-term - and unlike even 20 years ago it's almost impossible to cover up and intimidate groups into silence, no matter how much people like Murdoch might think they control the flow of information.