Pay-rise tax belongs in Fairyland

Sushil Wadhwani suggests taxing firms which award pay rises of three per cent or more. Will that include MPs, civil servants and CEOs?

Richard Burnett, Hull

I’m afraid the Government economics adviser Wadhwani is living in Fairyland if he thinks private companies funding above-inflation pay increases through price increases won’t recover his proposed new taxes in the same way. Unfortunately, taxpayers who fund the public sector pay rises have no such option.

Roy Daniels, Luton

Any first-year economic student would tell you this suggestion is not at all workable. Hopefully somebody in the Treasury pointed this out.

Edwin Skinner, Colchester