Lib Dems push for early 2015 Budget to stop Tory 'giveaway'

George Osborne with Budget dispatch box Image copyright AP
Image caption George Osborne normally announces his Budget in March

The Lib Dems want the 2015 Budget to be brought forward to stop the chancellor using it as a pre-general election giveaway, BBC Newsnight understands.

They will push for a February Budget, instead of one in March, in a bid to deny George Osborne a moment similar to Nigel Lawson's 1987 pre-election cut in the basic rate of tax, from 29% to 27%.

They also want more opportunity to promote their own policies.

Conservatives say a flashy pre-election Budget would be counter-productive.

They insist they think it would weaken the credibility of their central message of economic revival and fiscal rectitude.

But Lib Dems have told Newsnight they do not believe this and expect some kind of Tory pre-election giveaway.

Fuel duty freeze

Conservative backbenchers are agitating for their party to increase the level at which people start paying 40% income tax or raise the threshold for employees' national insurance by more than inflation, to help the lowest paid.

Mr Osborne is likely to freeze fuel duty one more time.

With a Budget around mid-February, instead of a late March one, there would be about six weeks between the last fiscal statement by the coalition and the start of the general election campaign proper.

The plan, drawn up by senior Lib Dems, would give time for the party to work on differentiating itself from its coalition partners and effectively double the length of the general election campaign.

Image copyright Reuters
Image caption Parliament will be dissolved on 30 March 2015

Mr Osborne has said he needs to find £12bn in extra cuts from Britain's welfare bill.

Howevere, if he detailed many of these in next year's Budget, the Lib Dems may not be able to put their name to all of them.

An early Budget would allow them time to distance themselves from some of these cuts.

One source said: "At the moment the Budget will be at the end of March and that will be the end of the coalition.

"We are pushing for it to be earlier in a bid to allow some time to breathe, rather than allow Tories to announce giveaways and then go straight into an election."

Another source said they might settle on an early March Budget with "a condition that it's all about continuing the recovery with sensible and productive long-term investments, not pork-barrel politics to buy votes."

'Good luck'

The general election will be held on 7 May and Parliament will be dissolved on 30 March.

Senior Conservatives indicated that they would reject the Lib Dem request.

One Tory source said: "Good luck to them."

Another Tory source ridiculed the suggestion, saying that the Autumn statement would have been held in early December, meaning a gap of only two months between the two financial statements.

But Lib Dems believe the nature of negotiations up to the end of the coalition may mean the Tories have to make some accommodations.

Image copyright Getty Images
Image caption Who will act as Lib Dem election economic spokesman?

No senior Lib Dem is discussing the coalition collapsing before 30 March.

Business Secretary Vince Cable suggested 12 months ago that he thought a coalition break-up before its full five-year term was "certainly possible", though he said the party had not yet had those conversations.

He was said to believe the party needed some space to differentiate itself ahead of the general election.

Cable or Alexander?

Mr Cable is now understood to be on side with the coalition lasting all the way to next April.

The top of the party now appears to have coalesced around an attempt to bring forward the date of the Budget.

There is speculation that at the Lib Dem party conference, Chief Secretary to the Treasury Danny Alexander will be chosen over Mr Cable as the party's economic spokesman for the general election.

Coalition insiders told BBC Newsnight that whatever the date of the last Budget, the Lib Dems have told the Conservatives that they may hold a separate Budget statement.

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