Total taxes and spending under the Transformation Deal would be as follows
|Transaction taxes (and ‘Other’)||218|
|Transformation Deal Spending||871.74|
|(Basic Income+Benefits Spending)||(345.74)|
|Public sector Employers NI savings||-9.6|
|Corporate subsidies ended||-14|
|Central gov’t admin saving||-1.3|
*This is identical under the Transformation Deal as under the current regime (in 2015), thus countering any claims that there would be an increase in public spendng. The Welfare spend under the Deal is mostly monies returned to taxpayers, so is arguably a tax rebate. This allows us to argue that the Transformation Deal in fact poses a lower tax burden on the economy than the current system.
This leaves a fiscal deficit of £59.91bn.
This compares with the deficit for 2015 of £69.5bn
So, in fact, the Transformation Deal could narrow the deficit by nearly £10bn, or provide that amount for additional government spending. In my own view this money could be used to finance a transition to clean energy over the next generation, but that would need to be determined at a wider policy level.