What a radical Conservative government could do
Step one is to replace the benefits system with a more libertarian form of redistribution. Scrap all mainstream benefit payments – for example, child benefit, jobseeker’s allowance, housing benefit, winter fuel allowance and even the state pension. Scrap the income tax allowance too. Give all long-term UK residents a taxable basic income of £8,000 a year and charge a flat 40 per cent income tax rate on every penny. The basic income can be phased in on a residency basis over 10 years, ensuring that recent immigrants pay a larger net contribution to the exchequer.
.. it promotes individual responsibility and reduces the stigma of collecting money from the state. It gives everyone, rich and poor, a clear incentive to work. Compared with the current system, it redistributes to the working poor and to the highest earners – both groups that are likely to produce more taxable income in response.