Labour has claimed the Cabinet is divided over regional public pay proposals and called on the government to abandon the "ill-conceived" idea.
Shadow Cabinet Office minister Jon Trickett urged Francis Maude to "say goodbye to his inner Scrooge" during departmental questions on 19 December 2012.
But Cabinet Office Minister Mr Maude joked that his "inner Scrooge is the taxpayers' outer friend".
He claimed Labour had introduced regional local market-facing pay in one part of the Civil Service.
Mr Trickett said: "Civil Service relocation to a city like York is good, cost-effective, One Nation politics because it can help to overcome chronic, regional economic disparities as well.
"But if he insists on regionalising public sector pay, would it not simply further entrench already existing regional disparities? People in York doing exactly the same job as their colleagues elsewhere in the country will be paid less."
Mr Maude said the only part of the civil service that has been "moved to regional local market-facing pay" was the Courts and Tribunals Service "and the government that introduced it was his own".