POLITICIANS are by instinct incrementalists. They espouse the rhetoric of radicalism, but in reality they tend to shave a bit off their predecessors' legacy here and add a bit there; to shuffle to the right or edge to the left. Both they and their voters avoid radical change whenever possible.

The British government, preparing for an emergency budget on June 22nd, can go the incrementalist route, minimising the extent of change and accepting the shape of taxation and spending that Labour has bequeathed it. Or it can take the radical road, bin previous plans and its own election pledges, and offer up a fiscal system designed for the future, not dictated by the past. This newspaper has no doubt which it would prefer.

Top of the flops

The fiscal deficit that George Osborne, the chancellor of the exchequer, must tackle is not just the biggest in Britain's post-war history; on forecasts by the IMF in May, getting the public finances back on track is the toughest assignment facing any G20 country. We lay out the full details here.

Mr Osborne needs spending cuts and tax increases that add up to around 7% of GDP, while avoiding imperilling a still-fragile economy. Three principles should guide him. First, most of the retrenchment should come from cutting spending; second, any new taxes should focus on consumption; and third, both spending cuts and tax increases should be designed not just to cut the deficit but also to refashion government.

On the first point, although some tax increases will be needed to shore up fiscal capacity lost when revenue-raising financial services and property deals bit the dust, international experience argues that spending cuts, not tax rises, should bear the brunt. And given that spending has risen by ten percentage points to almost half of GDP in less than a decade, there is scope for cutting. The government's plan to extract 80% of the adjustment from spending is a good starting point.

Debates about how to cut spending tend to get stuck in a sterile argument about whether it is best to dictate a standard reduction across the board and tell departments to get on with it (as happened in Sweden), or to pick on particular areas (as in Canada). Mr Osborne needs to do both. Given the huge growth in government over the past decade, some form of universal cut, even if it is just a few percentage points, should apply to all departments. But future priorities will be different from past ones and some departments are more wasteful than others, so there should be selective culling on top of that.

That means breaking a (bad) promise. Before the election, the Tories promised not to cut health expenditure. But the health service, which absorbs about a fifth of total spending, has been the prime recipient of Labour's largesse, and too much of the money has gone into pampering doctors. The government should walk away from that commitment, blaming the unknowable fiscal horrors Labour left behind it.

A second target is welfare, which accounts for more than a quarter of all spending. The biggest chunk of welfare is providing the state pension. Pension payments should not be cut, because British pensioners get one of the rawest deals in Europe; but the total bill could be reduced by raising the pensionable age. That would encourage people to stay in work, which is good for health, happiness and tax revenues.

Other welfare spending on the better-off should be cut back. Two examples are child benefit, which all parents of dependent children receive, and winter-fuel payments, to which all households with someone over 60 are entitled. Child benefit should be means-tested; and, as state pensions are being reinforced a bit anyway, fuel payments should cease. Too much money also goes on long-term benefits for fundamentally fit people of working age, which helps neither them nor the budget. Cutting this will be harder because it requires reforms to help people into work. Labour tackled the problem late in life; the new government must pick up the baton and run faster.

One choice across all public services is how much to carve out of capital spending, which voters tend to notice less because its impact is long-term. A smaller economy may justify some lessening of ambition where physical infrastructure is concerned. But for Britain to emerge from this crisis its economy must grow, and this takes decent roads and rail and research labs. Labour's plan to cut net investment by 1.5% of GDP should be whittled back.

In cutting current spending, the public-sector payroll is an obvious target, not least because public employees are better paid and have much nicer pensions than most private employees. A public pay freeze for two years would bring wages back into line, and public employees should be required to contribute a lot more towards their generous pensions. The public-sector head count has grown by over a tenth in the past decade, and as many as 400,000 jobs may have to go.

Carbon tax, your time has come

Sensible selective slashing along these lines could cut spending by 5% of GDP or so. That leaves up to 2% to come from tax rises. Labour left an unhappy soak-the-rich potpourri of income, national-insurance and other tax increases worth 1.2% of GDP; the government wants to trim it to 0.8%, but it is proposing further dubious tinkering with income-tax allowances and capital-gains rates. It would be better to raise consumption taxes, which don't discourage people from working or saving.

This could mean increasing VAT a notch or two, but it is also a chance to strike out from shore and introduce a new carbon tax. Properly designed, such a tax could not just raise revenue but also help to cut greenhouse-gas emissions and encourage investment in alternative energy sources (see article). Since both the carbon tax and VAT hit the poor harder than the rich, some offsetting rise should be inflicted on the well-off. The best option may be to stick with some of Labour's tax hikes.

In all this, the government must keep a close eye on the health of the economy. While the recovery remains fragile, there is no advantage in sticking dogmatically to a timetable. On the timing of the retrenchment, Mr Osborne must show caution; on its substance, he must show courage.