What is the consequence of going to the polls on 4 July?

Rishi Sunak’s surprise announcement of an election on Thursday 4 July came the day before the House of Commons was due to have its final session before going into recess until Monday 3 June. Here are a few first thoughts on what lies ahead:

• We are now in ‘wash up’ until 30 May, when parliament is prorogued, leaving the required 25 days before the polls open. The formal election timetable can be found here.

• The ‘wash up’ period sees outstanding bills dropped or rushed through parliament, often on a bare bones consensus basis. That will include the relatively thin Finance (No 2) Bill 2024, currently at report stage. It’s worth noting that this contains no provisions relating to the proposed changes to the rules on the impact of one’s domicile on UK taxation.

• Except for the 2019 election, six of the last seven elections have been held in May or June, so we have some experience of what the recent consequences of an election in, or close to summer look like.

• If we look back to the 1 May 1997 election, which heralded the arrival of Tony Blair to Downing Street, Gordon Brown’s first Budget followed two months and a day later. The Conservatives’ 2010 election victory on 6 May was followed by George Osborne’s first Budget on 22 June. It is therefore quite possible to envisage, assuming the polls are correct, that the first Rachel Reeves’ Budget could be around the start of September (the August Bank Holiday is on 26th).

• One benefit of calling the election in July is that it gives the new government more time to prepare a 2025-28 Spending Review, which Jeremy Hunt announced in the Budget would not occur until after the election. Look back to the May 2015 election, when David Cameron moved from coalition to majority government, and we see George Osborne having a second Budget on 8 July and a Spending Review on 25 November.

• The forthcoming Spending Review will have to put flesh on the very bare bones of Jeremy Hunt’s expenditure plans, recently described as ‘worse than fiction’ by the head of the OBR. Whichever party wins – and Labour has so far said it will stick with the Conservatives’ numbers – the Review will be challenging. Although Reeves has said that she wants one (autumn) Budget a year, in 2024 she might end up adding tax announcements to the Spending Review, as did Osborne in 2015.

• The election timing means that the compensation costs of the Horizon Post Office and contaminated blood scandals will first arrive in, and impact upon, the OBR’s next Economic and. Financial Outlook, currently due in autumn. By then there may also be other financial crises to handle. The FT has reported that Sue Gray, Starmer’s chief of staff, has drawn up a list of potential issues which includes Thames Water’s demise, universities collapsing and more councils entering s114 measures. 

• The Institute for Government envisages that, based on experience since 1997, the manifestos are likely to be launched between 5 and 16 June.

Source: Techlink Professional