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Hunt plays chess with your tax bill

24 November 2023
| by Field Team

With this week's Autumn Statement done and dusted, the Field Team take a look at when an election might take place.

Talk of an early general election in May 2024 was given fresh life this week despite the Tories dire position in the polls. The catalyst? Chancellor Jeremy Hunt’s autumn statement, which revealed unexpected personal and business tax cuts, while sidestepping controversial issues such as inheritance tax. With a sleight of hand, the Chancellor gave away about £20 billion after claiming credit for building a strong economy – but in reality the small print shows he plans to pay for it with very, very tight public spending after the election

Hunt’s big gamble is intended not only to capture the public’s attention but to undercut Labour’s narrative of being a change after 13-year Conservative rule. Labour, caught now in a delicate dance, faces the challenge of reversing tax cuts without alienating voters or leaving them intact at the risk of maintaining unwelcome reductions elsewhere.

Commentators immediately viewed this as an attempt by the Government to set up a sharp new dividing line with Labour, who responded with ritual attacks on 13 years of Tory mismanagement without taking a firm position in favour of tax cuts versus spending. 

Prime Minister Rishi Sunak has innocently insisted the measures have no pre-election motives, even while fresh rumours emerged the government plans to bring forward the Spring budget to February. Election watcher eye brows were raised further when it was announced political strategist Isaac Levido would return to Conservative Campaign Headquarters (CCHQ) full time from January 1st.

Going early is not without deep risks for Sunak. Recent immigration figures, revealing a staggering surge of 745,000 in the year to December 2022, have provoked another round of strong discontent among right-wing Conservatives. This surge adds another layer of complexity to the political landscape, intensifying the pressure on Sunak to promptly address the issue. Inflation may rise in January as energy bills get more expensive again.

And of course, the Tories remain around 20 points behind Labour – never forget Tony Blair won in 1997 with a 12.5 point lead. Even if polls close by a significant amount the Conservative Party faces electoral ruin. The trend will be key: if this week’s tax cut announcements see the Conservative ratings move up towards 30%, inflation continues to fall and small boat crossings are disrupted by winter weather then maybe – maybe – going early becomes worth the gamble.

Hunt’s Autumn Statement is about creating tactical flexibility. In truth nobody – including the Prime Minister – knows exactly when the election will be. There is no secret memo in Downing Street setting out the calendar. The landscape is best viewed as a Tory party preparing for Autumn 2024 – while making sure they are ready for May if events go their way. 

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