The UK government uses the budget deficit as its robotically bleated propaganda line to excuse a vicious agenda of budget cuts and privatizations (the trebling of tuition fees being a most prominent example).
A progressive government could implement a radical program of taxation and reform, or a New Deal, of the banking sector. Every penny of the £850 to £1 trillion that the banks were bailed out with would be reclaimed by the treasury, easily affordable from their greatly increased interest since then. Annually raised, would be £25 billion through a war on tax evasion, and £20 billion from a Robin Hood financial transaction tax. £888 million subsidy of the arms trade that sells weapons to genocidal dictators and juntas would additionally end, while the £130 billion Cold War Trident nuclear weapons system would be abolished. (Many more multi-billions will occur to me through further research and consideration).
This revenue of £1.2 trillion could eradicate the deficit into budget surplus, with no devastating injustice and economic contraction caused by public service, jobs, education, welfare, culture and infrastructure cuts.
Update, on day of the beginning of the Occupation of the London Stock Exchange: this more comprehensively cited blog post by Dr Éoin Clarke sets out £400 billion of cuts. I primarily forgot to mention the £217 billion spent on wasteful and inefficient "private finance initiatives" in the public sector. Make it £1.3 to 1.5 trillion.