Tax rises risk demoralising the public – and stifling Britain’s recovery

sir – I read with concern your report (May 13) that the Treasury may attempt to rebalance the books quickly, using the old strategies of tax increases and pay freezes. In normal times this might be the correct approach, but we are experiencing a once-in-a-century event, comparable to a war.

The goal must be to instil confidence in the population and the markets with a long-term recovery plan. People need a vision to engage with and money in their pockets, rather than the threat of another decade of austerity.

DJB Shearer Glasgow

sir – Britain’s coronavirus-induced recession presents as many economic and political opportunities as challenges.

The immediate priority must be to encourage enterprise, employment and efficiency. Supply-side fiscal reforms that enhance productivity, growth and job creation will produce a cycle of higher tax revenues, lower state spending and a falling debt ratio. Future spending increases on priority public services should be financed from efficiency savings and higher public-sector service charges.

Now is also the time to redress some of Britain’s inherent economic inequities. There was already an overwhelming case for higher taxes on non-productive assets such as land and property, and a widening of the scope of VAT and consumption taxes.

This Government has the chance to address issues such as the equal tax treatment of the self-employed, the abolition of higher-rate tax relief on pension contributions and the abandonment of the “triple lock”. The long-term gains would be incalculable.

Philip Duly

Haslemere, Surrey

sir – The problem with tax rises is that there will be less income, and fewer assets, to tax. Employees have been furloughed, businesses and the self-employed are suffering losses, and investment income has been cut (and in many cases cancelled) as corporations try to repair working capital. These losses will be carried into next year, too.

Taxing assets will merely cause a price collapse; fire sales are already taking place. Draconian tax increases will simply shrink the economy.

The solution has to be a bonfire of regulation, massive investment to improve productivity and – quelle

horreur – longer working hours. And we should thank God that interest rates are negative.

Charles Pugh

London SW10

sir – If we are to grow our way out of this crisis, an increasing deficit will have to take the strain for now.

However, there is one tax that Rishi Sunak should introduce: an online sales tax. Its fairness would be recognised by most, and some balance is needed if our bricks-and-mortar retailers are to survive.

Ross Ellens

Stony Stratford, Buckinghamshire