Will there be a pre-election Budget?

Will there be a pre-election Budget?

Is there no date because they can’t agree the contents?

Last year’s budget was delivered on 22 April, the latest ‘regular’ budget since they reverted to their traditional Spring slot. That date was announced on 12 February. More than three weeks beyond the equivalent date this year, there has been no announcement as to when the budget will be delivered. What’s going on?

The timing of the budget is intimately connected to the timing of the General Election: as parliament has to be sitting, it must be delivered at least three and a half weeks before the election – or after it. Knowing when the budget will be therefore allows us – and opposition parties – to rule out various dates as election possibilities and that may be behind the delay in the announcement.

However, if the Easter recess (yet to be set) is one week either side of the Easter weekend as last year, that would make 24 March the last Wednesday before the recess and 14 April the first afterwards – too late for a dissolution in time for a May 6 election.

In other words, if the Budget is not in the next three weeks, either the election will not be on May 6 or there will not be a pre-election budget.

It is true that parliament could sit for a day on April 12 but what would the point of that be? The date would flag up so obviously what was going on that it might as well be held before the recess without the need to drag all the Labour MP’s back to Westminster, which the government whips would have to do in case they otherwise got ambushed and lost a vote.

There is another possibility: that the reason there’s been no announcement of a date is because there’s no agreement on the contents. The government has a choice of rowing back on last year’s plans to heavily restrict growth in spending or going into the election with a launch pad of spending cuts and tax rises. On a loftier intellectual level, there may well also be disagreement between Numbers Ten and Eleven about whether the scale of the deficit or the fragility of the recovery poses the greater economic threat and therefore should have priority.

One way out of that impasse may be to hold the election first. Even a May 6 election would only be two weeks after the date of last year’s budget but April would also be back into play as an option – something it can‘t realistically be if a March budget is announced. The more tricky problem to finesse would be dealing with the other parties’ claims – and potentially the markets’ fears – as to what Labour might be hiding.

To delay the budget until after the election would be an audacious strategy – or an accidental one. Either way, it would be interesting to see a betting market on which will be first, the budget or the election.  The budget should still be favourite but not by all that much.

David Herdson

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