stabilising Britain’s finances to deliver our promises

If we are to be able to deliver the radical changes proposed in this manifesto as well as a restoring the health of the public finances, we must be honest about how these policies will be paid for. That is why here we have set out how our tax package will be funded, where we intend to increase spending and where we intend to make savings.

The savings we have identified far outweigh the amount of spending we are proposing, and it is these savings which will be used to start to reduce the deficit. All the savings we have identified are either instead of or additional to proposals the Government has already made. It is our working assumption that we will start to reduce the deficit from 2011-12 onwards.

restoring honesty and transparency

Following the election of a Liberal Democrat Government an emergency budget and interim spending review will be held no later than the end of June 2010.

This budget and spending review will have four purposes:

To put in place the necessary tax changes in order to raise the personal allowance to £10,000 for the start of financial year 2011-12.

To put in place cuts which could be realised within the financial year, such as scrapping the Child Trust Fund or restricting tax credits, to release money for our job and infrastructure package.

Subject to our five economic tests being met, to put into place cuts for 2011-12 identified in our manifesto.

To confirm the departmental spending shifts necessary to deliver our core manifesto commitments.