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A Snap Election in 2023?

Page 48 of the Conservative Manifesto promises to “get rid of the Fixed Term Parliaments Act – it has led to paralysis at a time the country needed decisive action”. We will lay a modest bet that this pledge doesn’t appear in this year’s 102-page Red Book (plus supporting documents). But it may say more about Rishi Sunak’s Budget than anything that appears in any of them.

The abolition of the Act will give Boris Johnson the freedom to seek an election before Thursday May 2 2024. He may not find himself in a position to obtain one, nor necessarily seek it, but the possibility makes political sense of today’s set-piece.

For the first law of Budgets is that measures are one thing but forecasts quite another. And we include in that last category tax cuts or rises that are promised, but not yet implemented.

The central feature of Sunak’s presentation was pleasure now and pain later – if that is quite the right way of describing Britain’s condition today, and as it emerges, God willing, from the pandemic.

Broadly speaking, there is to be £65 billion pounds worth of spending soon, to help fatten the economy up, and £28 billion pounds worth of tax rises later, to slim it down again. This is in the context of an Office for Budget Responsibility forecast of the following annual growth rates: four per cent this year, 7.3 per cent in 2022 (yes, you read that correctly), and then 1.7 per cent, 1.6 per cent and 1.7 per cent in the last three years of the forecast.

What’s the betting that, by the time of the 2023 Budget, this year’s growth has come in higher than four per cent, and next year’s higher than 7.3 per cent?

In that event, the Chancellor will be in a position to pluck one of those magical Budget rabbits out of his Treasury hat – and announce triumphantly that the higher growth has brought in higher tax revenues and so, bingo!

The Corporation Tax hike to 25 per cent, due to happen that year, will no longer be needed. The freezing of income tax allowa