BKL tax partner David Whiscombe comments for the UK200Group on Labour’s revelation that the current government lost £95bn in revenue during the last five years due to depressed wages and faces losing a further £109bn if the same happens during the next parliament.
‘This is true only at the trivial level, where higher wages mean higher taxes. But they also mean higher costs and ultimately, pursued to the extreme, an inflationary spiral. It’s tempting for Government to seek to inflate its way out of crippling public debt. But it’s been tried in the past and the cure is worse than the illness.’