Will a post-budget election save Sunak’s brand of Tories from near certain defeat? Brian Monteith

There are reasons to be cheerful about 2023, such as the long overdue departure of Nicola Sturgeon as First Minister. Yet, as the assumption of Humza Yousaf to the vacant position demonstrates, one should always be careful what one wishes for.

Many will be glad to have seen the back of 2023, hoping for a much better 2024, but life has a habit of throwing up the unpredictable and the unwanted, as well as the occasional unexpected pleasure.

As taxes continued to rise – and new Tory leaders blame past Tory leaders for it rather than recognise it was their complicity in the free-money, low interest rate policies of the Bank of England that made it inevitable – many are hoping for tax cuts in the March Budget.

Already the unofficial briefings about which taxes should be cut or abolished are doing the rounds. Much as I would love to see the abolition of Inheritance Tax – a charge on the success of people building astounding careers; businesses providing what people want; investors providing capital for new businesses; or other ways of growing our economy to the benefit of us all – the Tories should have delivered this policy when public finances were improving, not now when they are in a sorry state.

What we need are tax changes that encourage greater productivity and increase economic activity so more are working and fewer are reliant on the state – causing tax revenues to increase. That means cutting primarily business taxes that add burdensome costs or raid profits – so public houses like Edinburgh’s Auld Hoose are more likely to stay open and new businesses find it easier to start up.

Rather than see personal tax thresholds frozen or raised to match the current inflation rate, we need the entry points for tax bands all raised significantly ahead of inflation so there are immediate incentives to reward hard work by putting in extra hours, or taking on additional work through new or additional employment. This can bring growth and mean more investment in the productive sectors of the economy, creating a virtuous cycle that will raise all our boats.

To top it all the Tories should introduce a law that personal tax thresholds must always match the inflation rate so it takes a visible and highly controversial new law to break the default. Without a public commitment in an election manifesto to abolish tax thresholds matching inflation, such a punitive and damaging policy would not be protected by parliamentary convention from rejection by the House of Lords. A future government would not want to risk a constitutional crisis over a matter where it was taking money out of the pockets or purses of the public.

The nature of the March Budget is likely to determine the attractiveness of a May election. The argument goes that a government should wait for the most propitious moment, and that might be as late as possible – but the worry for Sunak’s brand of Tory Lite is voters will stay at home and sit on their hands. Tony Blair’s landslide in 1997 was achieved not just by raising the Labour vote but by the number of past supporters of the Conservative Party refusing to turn out for John Major’s (by then) unpalatable brand of Tories.

Calculations are already being made by Tory strategists about how to minimise any election defeat so the position can be reversed at a following election – and ensuring a high turnout is a crucial influence on saving seats that might otherwise fall victim to low expectations among Tory voters. Holding a general election on 2 May, the same day as English Council elections, is therefore a strong possibility.

Coming, as it would, within easy memory of a tax-cutting budget (“thank you for taking the bitter medicine, now have your reward”) and after tax changes applied in the new tax year beginning in April, Sunak, Hunt & Partners might hope the prospect of a high tax Labour Government will leave them clinging on with a small majority.

Personally, I don’t see it as being enough to save Sunak’s administration. The Conservatives, be it under Cameron, May, Johnson, Truss or Sunak have all – in their own specific ways – squandered the generous opportunities given to them to change the country for the better.

Rather than save the NHS, the lockdowns have only accelerated its inevitable implosion, despite it consuming additional millions far greater than numbers on the side of a red bus.

The Ponzi economics of encouraging greater legal or illegal immigration – to make up for our falling birth rate – as a means to fund the demographic time-bomb known as the welfare state is consigning us and most Western countries to impoverishment.

The failure to build enough houses and apartments for existing demand – never mind a UK population that grows through net migration by a city the size of Birmingham year on year – is creating an explosive generational gap between those that have property, but for the bank of Mum and Dad helping out many sons and daughters.

These problems should have been tackled by Conservative governments but were postponed in preference to plotting and infighting. Now Labour appears as the agent of change and is no longer as frightening as Jeremy Corbyn – whose spending plans were less profligate than what Sunak has delivered.

Likewise, Labour is the agent of change from SNP domination in Scotland – and shall surely reap the rewards of being dull and uninspiring, rather than charismatic but dangerous. Ironically, Scots Tories might benefit from being best placed to beat the SNP in some seats and so improve their relative strength.

Thus 2024 will undoubtedly be a year of change – the unanswered questions are surely only about the date and by how much.

Brian Monteith is a former member of the Scottish and European Parliaments and senior advisor to the Tax Reform Council.