Can you fix the economy? Try your hand at balancing the budget

Play leader for the day and try your hand at balancing Britain's budget
12 April 2012

The economy and Britain's £167billion deficit is dominating the 2010 general election. Depending on which party wins, we will have to start paying this money back.

This will inevitably mean there will be winners and losers in the forthcoming tax and spend budgets. But who should these be?

Should we put 15p a litre extra duty on fuel or raise the pension age to 66 now, rather than in 10 years time? Both initiatives would raise about £4 billion per year.

Or, should we increase VAT to 20.5% (still below the French level), rather than put 3p per £1 extra on the basic rate of income tax? Both would raise about £12 billion per year.

And of course there are improvements' that require funds – building of more affordable homes, tackling climate change, job creation, caring for an increasing aging population etc – each with a good case and each competing for ever scarcer resources.

It is easy to have views on any single topic but the leaders along with their chancellors have to balance the books'. One areas gain is another's potential loss and so to do a poll' on any single topic area ignores the fact that all these possible changes are cost-interdependent.

Each political party tests the water' with sound-bites suggesting individual taxing or spending initiatives, but none has bit the bullet' on how it could achieve the £30billion or £40 billion of net saving that might have to be made to keep the International Monetary Fund away from the door.

Up to now there has been no mechanism to find out what the the voters prefer. Lots of alternative tax and spend options, each with different impacts on the total budget, does not allow for an easy poll' format questionnaire.

But we have a method that enables voters to see at a glance the gain and loss of benefits and their impact on the total budget. And rather than presenting the results as a myriad of percentages for and against each option, by using some clever statistics and scenario modelling we can find that single budget allocation, involving most major tax and spend areas, that meets with as much approval as possible from the voters, for any overall net saving amount that might be required.

So try your hand at being a party leader for the day. The survey takes 15minutes to complete and will give you great insight into the taxing problems facing the parties.

In association with John Green, RFT Ltd.

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