Michael Savage: Snap election decision that could make or break Labour

A March poll would see voters turning out before tax increases kick in

The last time the Government entertained the idea of holding a snap election, it ended in disaster as Gordon Brown's last-minute decision to call it off left him facing accusations of dithering, while his party lost a gilt-edged chance of securing a majority.

Yet despite the débâcle of the 2007 autumn election that never was, improving poll results and the prospect of some good news on the economy has put talk of an early poll back on the agenda within the Labour Party.

Party chiefs have told No 10 that they are prepared for a quick decision to go to the electorate. The Prime Minister has also been rallying the troops, telling a private meeting of candidates in key seats recently that they needed to have their election material ready by the end of January. The activity has not gone unnoticed. Last week, one of Britain's biggest bookmakers suspended betting on a 25 March election after receiving some unusually big wagers.

Cabinet ministers still talk about an election for 6 May, which remains the most likely date, and senior Labour sources maintained last night that there was "no reason to think" that a March election was likely. But a number of MPs, especially those in marginal constituencies, are pushing for an early election as the factors in favour of a March ballot mount.

Holding the election six weeks early would give Mr Brown several advantages. His team hope official figures released in January will show Britain has emerged from the recession, allowing Labour to argue its fiscal stimulus package rescued the country from a protracted depression. Waiting until May risks scuppering that advantage should the next statistics, released in April, reveal that economic recovery has slowed.

A March poll would see voters turning out before tax increases kick in, such as a 50p top rate on earnings over £150,000. It would also help Labour avoid holding an austerity Budget, during which the Chancellor, Alistair Darling, would come under huge pressure to reveal the programmes that will be cut to reduce Britain's record deficit. Mr Brown would have the added advantage of avoiding the criticism that he was being forced to hold an election.

Closing polls have chimed with what many MPs have found on the doorstep. "Morale is much better in the party than just a few months ago," the former Europe minister Denis MacShane told The Independent. "I've told everyone locally to think about March as a possible election date. In the end, it is a very difficult decision." Emily Thornberry, the Labour MP in the marginal constituency of Islington South and Finsbury, also backed a March poll, saying she believed her party's vote was "hardening" in recent weeks.

However, some senior Labour figures believe that holding an early election to avoid a Budget would open the party up to accusations of cowardice and dishonesty. While there would not be much scope for major spending announcements, some would be unwilling to throw away the chance to come up with some eye-catching and popular measures.

The Conservatives were on the offensive yesterday over the prospect of an early election. Having been caught cold in 2007, they are already clearing swaths of their next manifesto to make sure they are ready at short notice. Party chairman Eric Pickles also stayed in the country over the summer to prepare the party for an election fight.

David Cameron said that his party was "all systems go" for a 25 March election, which he described as "quite a likely date". "I certainly want an early election," he told Sky News. "We really need to get on with this. I hope the election can come as early in the New Year as possible." He said Mr Brown had lost the "moral authority" to govern.

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