Ministers have been urged to implement proposals in a new report from the Taxpayers' Alliance and the Institute of Directors in order "to transform the competitiveness of the UK".

The report calls on the Government to radically shake up the British tax system by 2020. It also calls for a single proportionate income tax set at 30%, and gives eight taxes that could be scrapped entirely, including taxes on inheritance and transactions.

IoD chief economist and director Graeme Leach told the BBC: "I think this is the single biggest gamechanger out there to transform the competitiveness of the UK. We completely agree that at the moment we are taking, we are snipping a little bit of regulation here and doing a little bit on the tax front, but we're not doing what we need, which is basically to transform the UK economy in the 21st century.

"If we're going to remain a very wealthy, one of the most advanced economies, most affluent economies in the world, we've got to have world class performance and at the moment, the tax system isn't world class, it's barely fit for purpose."

A report from the Taxpayers' Alliance and the Institute of Directors has called on the Government to radically shake up the British tax system by 2020.

It calls for a single proportionate income tax set at 30%, and gives eight taxes that could be scrapped entirely, including taxes on inheritance and transactions.

Nick Clegg has tried to allay fears over the introduction of the tax on hot takeaway food, including Cornish pasties.

In a visit to Cornwall, where the tax will affect traditional regional food, Mr Clegg said the Government was “still listening” to concerns.

The change, christened the “pasty tax” by some, has been criticised for the effect it may have on the food industry.

Others have branded the change elitist after a series of high profile politicians said they had not eaten a Cornish pasty.

Online trading websites eBay and Amazon have been ordered to hand over the details of their members to see if they are avoiding tax. HM Revenue and Customs ordered the details to see if people who regularly trade goods for money over the internet are paying the relevant tax. The Government hopes to make millions from people who have not been paying the right tax as it cracks down on online trading.

Ed Miliband has urged the Government to tax bankers' bonuses and use the money to tackle the "absolutely ridiculous" youth unemployment rate.

The Labour leader said last week's local elections, which saw heavy losses for both the Conservatives and the Lib Dems, were a "verdict on the unfairness and economic failure" of the Coalition.

He urged the Government to drop plans to cut the top rate of tax and the 'granny tax' and instead introduce measures to ease unemployment among young people, which stands at almost 1 million.

He also claimed the Government still has the opportunity to drop the 50p rate cut and the reduction in pensioners' allowances from tomorrow's Queen's speech.

David Miliband also joined in the attack this morning, writing in the Mirror that the Government is "all political tactics, no national vision" and that Labour must now produce a "practical programme for government" to regain voters' trust.

Former Cabinet Secretary Lord O'Donnell has warned that there would be a 'very large cost' to the Treasury if the 45p tax rate is cut to 40p.

In an interview for The House magazine, he also revealed that he was considering applying for the post of Bank of England Governor.

He said research from the Office of Budget Responsibility clearly indicated the revenue maximising top rate of tax.

“What struck [me] was the – it’s buried away in a footnote  – solution to one of the all times biggest problems that economist have faced, which is 'what’s the income tax rate which maximises revenue?' And there it is, nobody’s mentioned it really, it’s there in a footnote: 48 per cent. That’s what’s there in the OBR report."

He is still to decide on applying for the Governor's position: "It’s a fascinating job, it’s a huge job, it’s a much bigger job than Mervyn’s doing at the minute. You’d need to think about how  you manage that and what support you’d need. I haven’t made up my mind about this yet."

More than 2,000 senior civil servants are on contracts designed to help them avoid paying tax, an official review has shown. Chief Secretary of the Treasury Danny Alexander warned departments that did not curtail the practice risked having their budgets cut.

Danny Alexander is to clamp down on loopholes that allow civil servants to avoid paying the full rate of income tax.

An official investigation found that 2,000 senior civil servants earning more than £58,200 avoided paying the full rate of tax by being employed ‘off payroll’, though service companies or employment agencies rather than directly.

Details were revealed in a letter from Mr Alexander to the Chancellor George Osborne, seen by BBC Newsnight. Mr Alexander said: “The sheer scale of off-payroll engagements across government, and the length and size of these contracts, suggests that the scope for artificial tax minimisation may be greater than previously understood.

Mr Alexander is to force any official who has been employed for more than six months on more than £220 a day to become full staff members.

Scotland's most senior Roman Catholic has launched a fierce attack on David Cameron for what he said was an immoral bias towards helping the rich. In an interview with the BBC, Cardinal Keith O'Brien urged the Prime Minister not just to help "your very rich colleagues".

This morning the Liberal Democrat president Tim Farron admitted the Cardinal’s comments would “sting” many MPs, and backed his calls for a financial transaction tax. Mr Farron told Sky News the rise in the income tax threshold would help many poorer people, but conceded that ultimately “the people who are suffering the worst at any time of austerity are bound to be the least well-off”.