Dr. Karina Doorley:

If we knew wage growth was, say, 2% last year, all the taxation parameters such as tax credits, the standard rate band and anything else that has a monetary parameter would also increase by the same rate such that there was no fiscal drag and people would not be paying a higher proportion of their earnings in tax. If we indexed the taxation system in the same way their earnings are growing, they would be paying the same proportion of their earnings in tax this year as they were last year.