// Next CEO warns against tax cuts, saying the real crisis is shortages of goods and services as inflation sees its biggest increase in 27 years
// “Just printing money will not really increase the quantity of goods in the country.”
Next boss Lord Wolfson has warned that tax cuts will not fix the challenges currently facing the British economy.
The Tory peer said inflationary pressures that are eating into household income can only be tackled by increasing the supply of goods and workers.
Apart from helping the poorest in society, he told The Telegraph that for most families “there is nothing the government can do” and “printing money” will do little to help the situation.
Lord Wolfson also predicted that when Britain heads into recession a slight drop in earnings is more likely than significant job losses due to high levels of employment.
- Next upgrades profit forecast as formal clothing lifts sales
- Next workers underpaid for months following payroll errors
Wolfson said that the government should prioritise ensuring the poorest in society are able to heat their homes and afford to eat, but added “there is nothing the government can do for everyone, because in the end, the problem is that there is less fuel, less goods, less services available, and that is why prices are going up”.
“Printing money won’t change until you tackle that fundamental problem.
“It’s going to be some supply-side measures and changes in supply, rather than demand-side measures like interest rates and fiscal measures.”
Wolfson called on ministers to allow more workers from abroad to come in to help ease the labour shortage.
He said: “If we have crops in our fields that no one is ready to pick, it won’t help inflation.
“It is going to be bad for inflation, as the crops will rot. And no one benefits from not allowing people to come into the country to harvest crops.”
His remarks came as the health secretary Sajid Javid defended the tax cuts proposed by Tory leadership frontrunner Liz Truss and insisted they would not drive up inflation, which rose to 1.75% on August 8, up from 1.25% – the biggest increase in 27 years.
Wolfson comments come as Next upgraded its full-year profit forecast after warm weather and demand for formal clothing helped boost sales in the first half of the year.
The fashion retailer‘s sales performance exceeded expectations by £50 million, leading it to raise its full-year profit guidance by £10 million to £860 million.