Election 24

Sunak gambles on improving economy to win votes

Things can only get wetter: Rishi Sunak announces the general election

Rishi Sunak has taken the biggest gamble of his relatively short political career by calling a General Election on 4 July before the economy has recovered.

A sharp fall in inflation is said to have been a factor in convincing the Tory leader that the economic tide is turning in his favour.

However, senior Tories were questioning the wisdom of a summer election before any moves by the Bank of England to reduce the cost of borrowing and ahead of an autumn statement that may have included tax cuts.

Esther McVey, a minister in the Cabinet Office, said Mr Sunak would be better off waiting for an improved economic outlook to filter through to the public. 

One Downing Street figure suggested the Prime Minister was concerned that this may be as good as it gets before the public finances become stretched again and inflation ticks back up. His immigration plan could also unravel.

The latest YouGov polling conducted last week shows the Tories are languishing 27 points behind Labour in the polls, with no evidence that their position is improving. Few analysts believe Mr Sunak can bridge the gap in six weeks.

History is also against the Prime Minister. The last time a UK general election was held in July was in 1945 when voters responded to Tory leader Winston Churchill’s wartime victory by returning Labour in a landslide vote. Theresa May’s decision to call a snap election in June 2017 backfired as the Tories’ share of the vote shrank to leave her running a minority government.

Mr Sunak is expected to kick off the Scottish leg of his election campaign today with the latest polling suggests Labour has opened up a ten-point lead over the SNP. It suggests the SNP will see its 43 seats shrivel to just 11, while Labour will see its two seats rise to a dominant 35.

Polling analyst Prof Sir John Curtice said: “By calling the election now the Prime Minister is either very brave or extremely foolhardy and we will discover in the early hours of 5 July which of those judgements proves correct.”

John Curtice: judgement day

Mr Sunak announced the election outside Number Ten, being partly drowned out by a protestor in Whitehall playing Labour’s theme tune Things Can Only Get Better which was more like Things Can Only Get Wetter as the Prime Minister continued speaking through a downpour.

Determined to stick to his script, he declared the economy would provide brighter days ahead for his party. “Only a Conservative government led by me will not put our hard-earned economic stability at risk,” he said.

“We’ve tackled inflation, controlled debt, cut workers’ taxes, and increased the state pension by £900. We’ve reduced taxes on investment and seized the opportunities of Brexit to make this the best country in the world to grow a business, put record amounts of funding into our NHS and ensured it is now training the doctors and nurses it needs in the decades to come.”

He is also hoping the voters will respond to the decline in the cost of living, with food and energy prices now falling.

However, while inflation may have come down sharply to 2.3%, the fall was still short of expectations of 2.1%, casting doubt on a June cut in interest rates even before Mr Sunak’s announcement. Disappointment about the data sent the stock market lower.

“Investors and Rishi Sunak were treated with a sea of red that’s sweeping the country in more ways than one,” said Dan Coatsworth, investment analyst at AJ Bell. “The prime minister’s announcement of a summer general election has done little to alleviate market disappointment at this morning’s inflation figure coming in hotter than expected.

“Rishi Sunak declared inflation to be ‘back to normal’ and hammered home the message that ‘brighter days are ahead’ but investors focused on the 2.3% figure coming in higher than forecasts of 2.1%. That might seem like clutching at straws, but every tiny difference matters, especially when the Bank of England pays so much attention to every data point when deciding on monetary policy.

“Inflation heading towards the Bank’s 2% target and the country coming out of recession are central to Rishi Sunak’s election campaign, but the key question is whether this is enough to win votes in the fight against Labour, which is becoming a tougher battle by the day.”

Sir Keir Starmer
Sir Keir Starmer: opportunity (pic: Terry Murden / DB Media Services)

Labour leader Sir Keir Starmer said: “It will feel like a long campaign – I’m sure of that. But no matter what else is said and done. That opportunity for change is what this election is about.

“Over the course of the last four years – we have changed the Labour Party. Returned it once more to the service of working people.

“All we ask now – humbly – is to do exactly the same for our country. And return Britain to the service of working people. To that purpose.”

Scotland’s First Minister John Swinney said calling an election for the first week of the summer holidays showed “the contempt the Tories have for Scotland”.

He said: “This is perhaps the latest act of disrespect from a Conservative government to call an election during the Scottish summer school holidays.

“There will be schools in Scotland on holiday by the time polling day comes and that will not have been given a moment’s thought by the Tory election planners.”

MPs will be asked to sit on Friday, giving parliament just two days for “wash-up”, where the 28 bills currently making their way through parliament must either be passed or abandoned.

Bills in the system include: the Sentencing Bill, which would scrap short prison sentences; the Criminal Justice Bill, which includes several measures on police powers; the Renters Reform Bill, which aims to strengthen the rights of tenants; a bill to approve the leg of HS2 between Crewe and Manchester; the Tobacco and Vapes Bill, which would make smoking illegal for those born before 2009; and the Football Governance Bill, which would introduce a state regulator for the sport.

Ministers will remain in their posts, but most MPs will return to their constituencies.

Key election-related dates

• May 24: Parliament prorogued
• May 30: Parliament dissolved
• June 7: Deadline for nomination of candidates
• June 18: Deadline to register to vote
• July 4: UK general election
• July 9: New parliament summoned, MPs sworn in
• July 17: State opening of parliament and King’s speech

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