Conservatives are being urged to use their time out of power to embrace a radical overhaul of the tax system. Plans for a "single income tax" which would merge National Insurance and income tax at 30% will be discussed at the Tory conference in Manchester.

Former Business Secretary Sir Jacob Rees-Mogg said: "Simplified and lower taxes are essential for economic growth. Moving to a flat tax has been very successful in other countries and could provide the fillip to prosperity the country needs."

Under the proposals put forward by the Taxpayers' Alliance (TPA), a sweeping range of rates, duties and levies would be axed and replaced with a single flat rate on all income above a personal allowance. Taxes abolished include vehicle excise duty, stamp duty, air passenger duty and the television licence fee. The TPA says these moves alone would save the average household £658.

Under its "blueprint", the personal allowance would be hiked to stop people on the state pension being forced to pay tax.

The campaign group also wants the abolition of inheritance tax, corporation tax and capital gains tax.

John O'Connell, chief executive of the TPA, said: "Taxpayers are crying out for some bold, radical policies on tax given the long term economic stagnation we have been suffering. The single income tax undoubtedly fits the bill, and while there are enormous challenges ahead for delivering this policy the Conservatives have a chance in Opposition have a unique opportunity to start making the case for this fairer, more efficient, simpler tax system.

"At the very least the Conservatives should be pledging to abolish some of the worst, most unpopular taxes if they get into government, namely inheritance tax, stamp duty and the licence fee."

On Sunday, "The Single Income Tax: A Blueprint for the Next Conservative Government" will be discussed at the Conservative party conference at an event hosted by the Taxpayers' Alliance.