Make yourself chancellor and create your own balanced budget

What would you do if you were chancellor? I think we all have opinions on this. Here, the first opinion – shared by most of the Moneyweek staff – is that we would take note of the ‘magic number’ and make an effort to work within it.

What is the magic number? You can read my interview with Nick Clegg in which we discussed it here. It refers to the amount of tax revenue a country can raise as a percentage of GDP. In the UK it has been between 33% and 37% for the entire post war period.

It doesn’t matter how much you raise in taxes, 37% is the most politicians get to spend without going into debt. That means that persistently spending 40-50% of GDP is something of a problem. So UK public spending has to fall. So far so consensual (in our office, anyway).

The next bit is a little trickier. If we must cut, what should we cut? One answer comes from the Taxpayer’s Alliance (their spending plan is here, and, with their permission, we have reproduced their spending calculator below). If you want to make yourself George Osborne for a day and see what would happen if you made your own cuts, you can do so here. Simply click on the things you don’t think we need and create your own balanced budget.

Easy….

£ 0 million

You've reduced spending in 2020-21 by £ 0 million!

    Abolish Departments
  • Education
  • Health
  • Pay and Pensions
  • Transport
  • Welfare
  • Other
source: The TaxPayers Alliance

You've reduced spending in 2020-21 by £ 0 million

Reduced spending in 2020-21

£ 0 million