Chancellor Rishi Sunak has told Conservative MPs that he plans to hike taxes, although was quick to reassure that there will not be a “horror show with no end in sight”. It comes as the Government begins to make moves towards overcoming the devastating effect the coronavirus pandemic and lockdown has had on the UK economy. He urged swathes of the new 2019 Tory intake – which included MPs from previously “Red Wall” seats – to put their trust in him over the “short-term challenges” the party and country faces. Currently, the Chancellor is understood to be looking at hiking corporation tax from 19% to 24% to raise £12billion next year and £17billion in 2023/24. Second-home owners would also be hit under proposals to require people to pay capital gains tax (CGT) at the same rate as they pay income tax. Many have urged the Government not to target already failing businesses with higher rates, and to not persecute middle class and low to high income band earners. One question is the overall burden. Do we push tax rates up or down? Some commentators have expressed the view that to increase tax in order to deal with the immediate deficit this year might actually be cutting off your nose to spite your face. The suggestion is that we should see the cost of dealing with COVID a little bit like a war debt – that doesn’t mean we can ignore it, but if the Government genuinely believes this is a once in a generation shock, we could realistically pay that off over a generation. We could say that, for sake of argument, the crisis has cost the Government £400bn, so we’re going to pay this back at £40bn a year for the next ten years. One view is that this would be a more sensible way to do it than immediately try to raise £400bn in taxes now. While the Government isn’t suggesting that at the moment, we don’t need to be as quick on paying it back; we don’t need to solve the mess in the public finances overnight.