Budget Battle
Close the gap, negotiate with five ministers and reach December with the government still standing.
Deficit
5.9%
Debt
118%
Bond yield
3.60%
Political capital
50
Popularity
45%
The dossier
15 measures, each with a fiscal yield, a political cost and a growth effect.
| Measure | Type | Balance | Capital | Popularity |
|---|---|---|---|---|
| Freeze benefit indexation for one year Pensions and benefits keep their cash value but stop tracking inflation. The single biggest lever available. |
Spending | +9 bn | −10 | -9 |
| Cut ministry operating costs by 5% Travel, property, consultancy and IT contracts across every department. Boring, real and comparatively painless. |
Spending | +3.5 bn | −4 | -3 |
| Replace only two of every three leavers Attrition, not redundancy: headcount falls without dismissal notices. |
Spending | +4 bn | −6 | -5 |
| Trim grants to local government Councils absorb part of the adjustment. Expect mayors of every party to say so, loudly. |
Spending | +5 bn | −5 | -4 |
| Close the least defensible tax loopholes A flat cut across reliefs that no one can justify on a whiteboard — only in a lobbying meeting. |
Spending | +4 bn | −5 | -2 |
| Health procurement and generic prescribing Cheaper generics, bulk purchasing, day surgery. Real money, no rationing headline. |
Spending | +3 bn | −3 | -1 |
| Merge and shrink state agencies Every agency defends its own line. The savings are genuine but the fight is political. |
Spending | +2.5 bn | −3 | -2 |
| Slow the defence build-up Delays equipment orders already signed. Fiscally tidy, geopolitically awkward. |
Spending | +3.5 bn | −6 | -2 |
| Exceptional surtax on large companies One-off levy on the biggest balance sheets. Popular, and it makes the deficit fall fast. |
Revenue | +8 bn | −8 | 3 |
| Contribution on the largest fortunes A targeted wealth levy. Whispers about capital flight are part of the deal. |
Revenue | +5 bn | −9 | 4 |
| Raise the flat tax on investment income A few points on dividends and interest. Cheap politically, unwelcome in the finance ministry. |
Revenue | +2 bn | −5 | 2 |
| Apply the standard VAT rate more widely Flights, some restaurant bills and a list of exceptions. Efficient, regressive. |
Revenue | +3 bn | −8 | -6 |
| Increase the carbon tax The fastest route to both revenue and a motorway blockade. Historically explosive. |
Revenue | +4 bn | −10 | -9 |
| Fund a serious tax-fraud crackdown More auditors, better data matching. Pays for itself in two years and everyone approves. |
Revenue | +2 bn | −3 | 3 |
| Levy on share buybacks A small tax on companies buying back their own stock. Symbolically potent. |
Revenue | +2 bn | −5 | 3 |
Three profiles
- The Technocrat — Twenty years of budget files, no campaign instinct.
- The Negotiator — You have never lost a vote you agreed to hold.
- The Communicator — The country has heard of you before it has heard of your budget.
Four scenarios
- Standard mandate — No special rules — the intended first run.
- Energy shock (Premium) — Bond yields start 0.5pp higher and popularity drifts down 2 points every month.
- Coalition collapse (Premium) — You start with 10 fewer political capital points and amendments cost double.
- Debt crisis (Premium) — The spread penalty on a missed target is doubled and every downgrade costs extra popularity.
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