How are taxes raised and spent?
The government is starting a debate about where savings can be made in the money it spends.
There is general agreement that there will have to be cuts deal with the deficit - how much more money the government is spending than it is taking in.
There will probably also have to be increases in taxation in the coming years.
Follow this guide to find out more about how taxes are raised and spent.
Tax and spending
- The last government predicted in the Budget in March that it would spend a total of £704bn in the year to the end of March 2011.
- It expected to raise £541bn in the year through taxation, with the biggest contributors being income tax, national insurance and VAT.
- In order to make up the difference between expected taxes and spending, it planned to borrow £163bn.
- The biggest areas of spending are health, education and social protection, which includes benefits such as jobseeker's allowance.
- If big savings are to be made without cutting areas such as health, education or the police, other areas will have to be cut significantly.
- There may also have to be cuts to pay for the interest that has to be paid on the government's debt, which will grow as borrowing rises.
At the general election some of the parties promised to ring-fence areas of government spending, so they would protect spending on those areas.
Labour said they would protect spending on the NHS, education, the police and international development.
The Conservatives said they would not cut the NHS or international development.
The Liberal Democrats decided not to ring-fence any departments' spending.
Of course, if some areas of spending are protected, other areas have to be cut more to make the same savings.
The figures in the graphic are for the whole of the UK, but remember that in areas such as most spending on health and education, the government in Westminster only controls spending in England.
For Scotland, Wales and Northern Ireland, the promises not to make cuts would mean that enough funding would be allocated to avoid having to make cuts, but the Scottish Parliament, Welsh Assembly or Northern Ireland Assembly could choose to spend the money in other areas if they wanted to.