Tory MPs have suggested killing off Whitehall departments, lowering the benefit cap and imposing VAT on children's clothes and food in order to pay down the deficit.
Conservatives Dominic Raab, Kwasi Kwarteng, David Ruffley and Brooks Newmark from the Free Enterprise Group made the proposals at a meeting at the Institute of Economic Affairs (IEA) in Westminster on Monday morning.
Raab told the audience at the IEA that the government could save billions by halving the number of departments in a "Whitehall weight-watchers" plan. "Don't play safe," Raab said, in a message aimed at chancellor George Osborne. "Be brave, be bold".
Under his proposals, Vince Cable's Department for Business, Innovation and Skills (BIS) would be scrapped and its responsibilities passed to the Treasury. Ed Davey's Department for Energy and Climate Change (DECC) and Owen Paterson's Department for Environment, Food and Rural Affairs (Defra) would be merged.
Maria Miller's Department for Culture, Media and Sport would be killed off entirely. And the individual Scotland, Wales and Northern Ireland departments would be pulled together into one department of the regions.
Raab, a former diplomat, also suggested getting rid of Justine Greening's Department for International Development (DfID) and folding its functions back into the Foreign Office.
"If we are going to offer tax sweeteners to the electorate before the election we need to have an honest debate about how we are going to pay for it," Raab said.
"We ought be at least considering everything across the board, from cutting Whitehall departments, means testing 'grey welfare', ending ring-fencing of departmental budgets ... I don't think we can start doling out tax cuts without that honest debate."
A spokesman for the Public and Commercial Services Union (PCS) which represents civil servants said: "At a time when the country is rallying to help the hundreds of thousands of people who have lost their homes in Typhoon Haiyan, calling for DfID to be closed down is not just insensitive, it is downright offensive."
The MPs were also united in urging Osborne to lower the benefit cap. Under the coalition the maximum that can be claimed in welfare has been set a £26,000 - but the Tory backbenchers said this was too high.
Newmark said the current cap was "unacceptable" as it was effectively equivalent to a £35,000 salary before tax. "I would like to see it lowered, I believe most of our 'hardworking people' out there would like to see that," he said. And Ruffley said the current level was "way too generous" and suggested it be lowered to "something around £20,000" after tax.
However the group split over Spelthorne MP Kwarteng's suggestion of cutting VAT to 15% but removing the exemption on children's clothes and food.
Kwarteng lamented the "schoolboyish campaign" by the press over Osborne's 2012 'omnishambles' Budget which saw the government u-turn on a number of VAT rises including on pasties and caravans. "We should have stuck to our guns." he said. "If you look at last year's budget, we reversed because we thought it was politically unpopular. Yet the reversals in many ways were more toxic than the actual proposals. We're still recovering from it."
However, Newmark warned that standardising VAT would leave an open goal for Labour. "Going into an election charging 15% VAT on children's clothing and food I think is potentially toxic," he said.