Try it if you dare. The FT deficit buster — an online simulator of the next three year spending round — allows you to choose your own package of cuts. It should definitely carry a health warning.
The project started as a simple question: can we show what it would take to halve the deficit by making £30-40bn cuts? The answer exposes just how little all three main parties are willing to tell you about the looming spending squeeze.
Take the easiest option in the game: acting as your own chancellor, free of party spending commitments. In today’s splash, we include an illustrative package of measures to make savings in the order of £40bn:
A 5 per cent cut in public sector pay; freezing benefits for a year; means-testing child benefit; abolishing winter fuel payments and free television licences; reducing prison numbers by a quarter; axing the two planned aircraft carriers; withdrawing free bus passes for pensioners; delaying Crossrail for three years; halving roads maintenance; stopping school building; halving the spend on teaching assistants and NHS dentistry; and cutting funding to Scotland and Wales by 10 per cent.
Now if you opt to be a Conservative chancellor, our estimate of the level of cuts required rises to around £55bn, which would require a package of this order:
A 2.5 per cent levy on public sector pensions; a 7 per cent cut to public sector pay bill; freezing benefits for a year; increasing withdrawal of tax credits; means testing child benefit; scrapping contributory incapacity benefit; cutting police numbers by 25 per cent; cutting armed forces by 25,000; axing a third of transport funding to London; delaying Crossrail for three years; halving spending on roads; cutting rail funding by a fifth; stopping all school building; halving spending on teaching assistants; cutting higher and further education funding by 25 per cent; halving social housing investment; cutting the DCLG grant to councils by 10 per cent; and cutting funding to Scotland and Wales by 10 per cent.
For any politician, this is certainly a career limiting set of options. There are alternatives but most of them are just as unappealing. The sheer scale of cuts required may in fact be practically impossible in some areas and departments. Politicians may say they want to concentrate on spending restraint, but huge taxes hikes will become an increasingly attractive option for the next chancellor.
Do have a go at cutting the deficit yourself. What would I do? From these options, this is my path to cutting around £40bn:
A 2.5 per cent levy on public sector pensions; a 7 per cent cut to the public sector pay bill (up to 400,000 job cuts); freezing benefits for a year; means test child benefit; scrap winter fuel payments and free TV licences; reduce prison numbers by a quarter; cut armed forces by 25,000; axe free bus passes for pensioners; halve spending on teaching assistants salaries; cut central government grant to councils by 10 per cent; cut funding to Scotland, Wales and Northern Ireland by 10 per cent.
Jim Pickard
Kiran Stacey