How are taxes raised and spent?

One of the main policy differences between the three big parties in this years election is that of taxation and cuts. All parties agree that cuts need to be made and the chances are that taxes will rise in the coming years.

So how are taxes raised and spent?

• In this years Budget, the current Labour Government said that would spend £704 billion during the year up to the end of March 2011.

• The Government expect to raise £541 billion through taxation, with most coming from Income Tax (£146 billion), National Insurance (£97 billion) and VAT (£78 billion).

• They would need to borrow £163 billion to make up the difference between taxes and spending.

• Most money raised will be spent on health (£122 billion), education (£89 billion) and social protection e.g. benefits (£196 billion).

• Other key spending includes Public Order (£36 billion), International Development (£6 billion) and defence, social services, housing, transport, industry etc. (£210 billion).

• Interest on the debts the government has built up will come to £43 billion.