There is only one reason to accumulate political capital, and that is to spend it to maximum effect. George Osborne’s Budget next week is a once in a generation opportunity to remodel Britain. If the Chancellor wishes to be remembered as one of the great reformers, a statesman in the mould of Lord Lawson or Lord Howe, he must stun us all with his radicalism.

With five years to demonstrate their positive impact, there is no better time than the present to push through politically painful but vitally important reforms on tax, spending and planning. Labour is temporarily debilitated and grateful Tory troops are the most loyal they will ever be, ahead of the looming bust-up over Europe.

First, and most controversially, the Chancellor must abolish the 45p tax rate,returning to the 40p rate that was in place between 1988 and 2010. The higher rate, combined with national insurance, reduces incentives to work and makes the UK less attractive to foreign investors. A lower rate would have a limited impact, if any, on tax receipts; I suspect that it would actually lead to an increase in reported income over time and actually help reduce the budget deficit.

The Chancellor must also restore the personal allowance for all earners: one of Gordon Brown’s final acts of fiscal vandalism was to ensure that it was progressively abolished for high earners, who now face an undefensibly high 62 per cent tax rate on some of their marginal income.

Tax cuts cannot just be for the better off: the Chancellor must make it clear that his greatest concern is to help Middle England. He should propose further increases to the personal allowance over the next few years, though this time primarily by raising the threshold for national insurance.

David Fuller's view

The previous coalition government did a good job in reducing unemployment, not least by incentivising low paid workers and people on the dole.  Now, with a Conservative government George Osborne needs to move quickly and decisively to create a more entrepreneurial and aspirational economy at all levels.  This is not rocket science and he knows what to do.  If the UK is seen as a good place to do business internationally, the economy will grow faster and debt can be reduced in the process.  The stock market will also benefit.