Was thinking similarly along this line.
Make the League Cup, 23 y.o. and younger players only restriction for EPL teams, but no age restrictions for all the lower divisions. Also, special treatment given to the 3 (or was it 2?) teams promoted to EPL this season, no age restrictions.
This way, we can "force" and help the top teams in giving their young players and promoting youth the necessary platform of breakthrough every season. Better chance anyway. Those ongoing "youth issue" and "lack of english footballers at EPL" can be solved easily. It'll also help England National team, and make the League Cup a lot more exciting, as it is the stage to see new England stars, and new young stars. Not only that, theoretically it would also help the career of the young footballers at the top clubs, who finds it hard as they encounter big blockage of breaking through to the first team, or even the squad.
By exposing them to play at this cup against the many teams at lower divisions, the stated teams then see the quality of the young stars, and tempted to bring/buy them in. The young stars could even be expose to the lower teams by playing against them and see how the clubs are, their style of play, tactics and formations, their fans, their manager, etc, and could use those to ponder on joining. The more these talented young footballers who have undergone training at the best facilities with the top team, join the lower teams.... the more the lower teams improve their football level.... and the more the teams breakthrough to EPL challenging the top teams. The lower divisions would also improve by a big notch, and become a lot more interesting to watch.
Yess, I could see it, English football at its peakest. The attitude is already there where the lower teams have a go when playing against the top teams, whether it's in League or FA cups eg. Wigan beat City recently. I think it's only in England where we get to see this David vs Goliath thing, or in other words, beating/killing the giants. Overall, English football would improve and become a lot more fun, and us spectators will get the benefit of seeing quality entertaining football, at every level.
Okay, just realized this post of mine is off-topic. The British Cup idea is also interesting, and worth to consider, but imo, too big of a change, since traditionally league cup is being played by teams in England only no?. The history of it, as little as it is in comparison, can make it deemed valueless or something. Also, have to take into consideration travelling expenses. Instead, how about having it as a new short tournament cup, during pre-season or slightly earlier, and see how it goes. Could help a lot, especially to the Irish and Scottish leagues. Well.. having Manchester United vs against you, even if it's a friendly.. people will know, and if you grab attentions, imagine what it can bring. Also, if it's done earlier, top english clubs have to use a lot more from the academy, since those times are when top footballers prefers to enjoy their holiday, so that way, it's still interesting to see youngsters given the chance. 