I would like to submit the broad idea of a social safety net which could be created by allowing tax payers to defer income.
This may sound radical however small business owners can do this already by choosing which year they may decide to take income/dividends in, and by doing so they may have a saftey net.
Covid has shown that even people in steady careers can be caught out by circumstances beyond their control. Conventional thinking tells people to save for 6 months living expenses in an emergency account.
During Covid the Government legislated to allow people access to Lifetime ISA's (ordinarily only accessible at age 60 or to buy first home) without penalty. So to some extent this was a citizen funded social safety net.
From the fallout of Covid and Brexit the Government will need to borrow more or raise taxes - this will no doubt be unpopular and/or challenging. It is also rumoured that pensions will be targeted further, at a time when people need to be convinced to save more.
Pyschologically people often have difficulty deferring income into pension, as this may be many years away and in effect untouchable in times of trouble - people often live for the day...
If people were able to defer income into a Government savings account, which would become accessible during times of hardship or when income may drop e.g. redundancy, entering higher education, early retirement, maternity periods, career break etc. then this maybe more palatable.
The government may see a drop in income tax/national insurance for this deferred income, but it may allow people to avoid claiming benefits and feel more secure in their lives, and indeed potentially take more risks to pursue more rewarding career paths.
Trials in countries that gave citizens a basic income, found that people often took more risks when they had some financial stability, in effect this could be like a self funded basic income depending on how much is saved.
I would suggest that at a minimum people would need to have the ability to defer upto £12500 i.e. 1 year of the personal allowance, more realistically this should be 2 years. The money should be saved pre-tax and linked to CPI in growth.
To limit the impact to taxation the building of the fund could be restricted to an amount per year e.g. £2500 pa would take 6 years to reach £12500 at maximum contribution.
If 10m taxpayers were able to save even £12500 in deferred income this would be £125bn which the government could have available to spend on public services. Assumning a withdrawal rate of 10-20% the balance would be over £100bn indefinitely.
The point being the impact of loss of tax is offset by cash injection to the Government bank account immediately i.e. for a lower rate tax payer £500 plus NI would have been taken from £2500 income but instead the Government would in effect have tax payer funded loans 5 x greater.
Overtime this could be expanded potentially to allow withdrawal by a dependent child at University perhaps or to trade an element of risk regarding social care - this would give citizens options in their own destiny rather than dictated by Government.
Anyway that's my idea, don't know what the Labour party would make of it, I know people helping themselves doesn't sound particularly socialist but I think its a progressive policy which would appeal to many including the types of voters Labour need to regain in order to form a Government.