Flat taxes and benefits.
I would abolish all of these:-
lower rate bands
higher rate bands
additional rate bands
job seekers allowance
employment support allowance
council tax support
working tax credit
child tax credit
any other kind of tax credits
and replace them at zero net cost with:-
1) a single flat rate benefit payable to every adult.
2) a single flat rate income tax payable from your very first pound earned to your last.
Today, someone earning £100k pays 40% tax, but not £40k. The total tax bill is about £29,822.
Today, someone on benefits gets £71.70pw = £3,728 pa.
Average housing benefit (2011) is £97.15 pw = £5,052 pa.
Total average benefit (not including all listed above) = £8,780 pa.
Total 'benefit' of personal allowance and lower rate band = £40k - £29,822 = £10,178 pa.
So if everyone 'signed on' once a year with proper passport-style identity checks to get their flat rate benefit of around £9k pa they could then find their own housing and pay their own council tax without any further nanny-ing by the state. Above anything else it's FAIR.
Any employer would deduct a flat 40% of pay, making life much simpler for them. Any illegal immigrants taking jobs would be paying tax (not very serious, but seems topical). People previously on benefits would be able to work without losing any benefits. Benefit fraud of this kind would be eliminated completely.
As a consequence, about 80% of benefit staff would no longer be needed, providing a massive saving. HMRC staff would be able to concentrate on catching the big fish instead of chasing minnows. Minimum wage would no longer be necessary, as minimum standards are already ensured. People previously on benefits living in some of the most expensive real estate in the world would have to move. People previously on benefits living in some of the cheapest real estate would have spare cash to spend in the community, thereby providing a welcome boost to that local economy. Property prices would be subject to a 'leveling' effect.
The biggest positive effect I anticipate is that those people previously on the margin between benefits and meaningful employment would no longer have the threat of benefit reductions to dissuade them from taking jobs that might be temporary, unreliable or low paid. Given the prospect of immediate reward without risk of losing benefits, many people would be drawn into work, which is better for them and better for UK plc as a whole.
Subsequent governments (after I have relinquished my benevolent dictator status!) would have 2 simple, understandable and visibly fair levers to manipulate instead of a gazillion different regulations.
Lastly, every adult EU citizen (that's you, me and the Romanians) would have to have lived in the UK for a set time to qualify (could be 5 years, could be 18).