The Chancellor's pre-election budget. What you need to know.

Simon Burton OBE, Senior Counsel at Lexington

The Chancellor's Budget Statement is always a key moment in the political calendar, but it takes on added significance when you are in a general election year, significantly behind in the opinion polls, and the economy is in recession.

Conservatives will be hoping that the measures announced by Jeremy Hunt this week can inject some hope that there is still something to play for ahead of the start of the official campaign.

History is not on the Chancellor’s side.

In the last Budget before the 1997 campaign, then-Chancellor Ken Clarke cut income tax and pinned his hopes on a growing economy delivering for John Major. In the run-up to 2010 Alistair Darling announced a Stamp Duty holiday for first time buyers and increased the top rate of income tax to 50% - setting a political trap for the incoming Conservative administration. In both instances it wasn’t enough to sway the public mood, with both being ejected from office once the votes were counted.

Hunt is on a sticky wicket.

The Chancellor has limited fiscal headroom for traditional pre-election sweeteners and finds himself bound by his own fiscal rules. Backbenchers are keen to see the overall tax burden fall, while also campaigning for increased spending in areas like defence – which Number 11 will likely find incompatible aims. There has been press speculation on several measures with further cuts to National Insurance, taxes on vapes, charges on second homes, and non-dom status being abolished being the latest rumours. We will have to wait until Wednesday for the exact measures, although we can be fairly sure that what has become an annual announcement of Fuel Duty being frozen will be made once more.

Will it be enough?

On the day itself we can expect the Chancellor to namecheck his backbench colleagues for their ‘tireless campaigning’ in announcing small capital projects that can be painted as a win for their constituencies. He will also rehearse the lines that will form a central part of the Conservative general election campaign – that he has steered the nation through a difficult economic period globally, he has a plan for growth, and it shouldn’t be put at risk by a Labour government. For his part, Sir Keir Starmer will respond in kind saying the Tories crashed the economy, their plan has failed resulting in lower living standards, and it is time for change. These attack lines will be repeated endlessly as we head to the election where we will find out if Hunt has done enough to avoid entering opposition, like Clarke and Darling before him.

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