Budget

It is more difficult than it should be to extract from government figures exactly how our tax is being spent, in order to make precise judgments about what not to spend it on. But we committed ourselves to be frank about the tough choices to be made, and not to fudge, hedge, and dissemble like the mainstream parties. The following figures may well need modifying in the light of better information, but this is our best guess of how our proposed changes would stack up, and where cuts would have to be found.

Spending

Receipts

Deficit

The deficit under our alternative proposed above would be £76bn from current expenditure and receipts, before asset-sales, compared to the Government's £160bn for the current year.

Further deficit reductions would be achieved in subsequent years from:

1. public-sector wage freeze,
2. reformation and restraint of public-sector pension arrangements, and
3. increasing revenues from Flat Tax, National Insurance, corporation tax, and business rates due to Laffer-Curve benefits of cutting taxes on employment.

These deficit reductions would be countered by:

1. falling revenues from sales taxes (VAT and local sales tax) due to Laffer-Curve disadvantages of raising taxes (but proportionately less than cut in employment taxes), and
2. falling revenues from energy levies as efficiency and alternative energies are incentivised.

(a), (b) and (c) are larger changes to larger budget items than (i) and (ii), so should outweigh them. The proposed initial reduction in the deficit is roughly equal to the structural part of the deficit (so long as things don't get worse, for instance with higher debt-interest payments). Economic growth, strongly encouraged by these changes, should close the remaining cyclical deficit.

The process can be accelerated by asset-sales to prevent debt getting out of control, and to boost growth by moving commercial activities out of the public sector and into the private sector.

Sales/privatisation

• The Tote (as per Budget 2010)
• Student Loans Portfolio (as per Budget 2010)
• Dartford Crossing (as per Budget 2010)
• High Speed 1 (as per Budget 2010)
• URENCO (as per Budget 2010)
• Forestry Commission (sell forests at rate of £200m/year for foreseeable future)
• BBC1, BBC3, BBC4, Radio 1, Radio 2, Radio 3, Radio 5 (keeping BBC2, Radio 4 and World Service in public ownership, funded from central revenues, licence-fee scrapped)

Reduced intervention costs

Many government interventions nowadays act through the private sector, and don't go through the government books. Reducing these burdens improves the efficiency of the economy and the tax revenues that are likely to be achieved, even though they do not have a direct effect on the government budget. We would lift many billions of pounds of burden on the economy by scrapping or derogating from:

• The minimum wage (unnecessary when people are protected by the Basic Income)
• The Union Modernisation Fund
• Consultancy contracts for reports supporting policy assessments, which won't be needed if we are not trying to micro-manage schemes and outcomes any more
• The European Union Emissions Trading Scheme
• The Renewables Obligation
• The Micro-Generation Feed-in Tariff
• The Renewable Heat Incentive
• The Carbon Reduction Commitment
• The Carbon Emission Reduction Target, the Community Energy Saving Programme and the Warm Front programme
• Most grant schemes
• The incentives for Carbon Capture and Storage
• The Large Combustion Plant Directive
• The Industrial Emissions Directive
• The Renewables Directive
• The Waste Incineration Directive
• The Landfill Directive
• and so on...