Tories believe Brown will go to the country in March

Economic figures may mean that early election suits Prime Minister
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Indy Politics

Senior conservatives believe that Gordon Brown may call a general election next March to head off the prospect of bad economic statistics scuppering his claim that he had guided Britain safely out of recession.

The economy is expected to start to grow in the final three months of this year, with the official figures due to be released in January. But if that growth is not maintained when figures for the first quarter of 2010 are issued in April, that would deal a devastating blow to the Prime Minister.

"There is a real possibility that, after one quarter of growth, Britain slips backwards," said one Tory frontbencher. "If that happened, there would be fears about a double-dip recession. It would blow Brown's credentials as the man who steered us through the storm out of the water."

The Government suffered a setback last month when the Office for National Statistics said the economy contracted by 0.4 per cent in the third quarter of this year, confounding City expectations that the country had already emerged from recession. The figure may be revised in statistics to be published today.

Shadow Cabinet ministers are actively discussing Mr Brown's election options. Although several still expect him to hang on until 6 May, when local elections are due to be held, a growing number suspect that he might opt for earlier.

A senior Tory official said: "We are not on red alert for March but it is certainly true that we don't rule it out. We will be ready whenever it comes."

Last night senior Labour sources discounted the possibility of a March election. The party's officials have a working assumption of 6 May but do not rule out an April poll.

One argument in favour of an early election is it would be before tax rises due to take effect in April – including a higher 50p top rate on earnings over £150,000. But one possible downside for Labour is that it would almost certainly prevent a Budget being held in the run-up to the election.

Under the fiscal stability code for which Mr Brown legislated in 1998, there must be a gap of at least three months between the pre-Budget report and the Budget. The Chancellor, Alistair Darling, will present his PBR on 9 December, so the Budget could not be held until 9 March, preventing a 25 March election being announced at the start of the month.

With a huge black hole in the public finances to be filled, the prospects of a giveaway eve of election Budget would be limited – although Labour might not want to give up the option of a few headline-grabbing "goodies".

If an election is called without a Budget being held, the Tories plan to accuse Labour of "running scared" and trying to "hide the truth" about the state of the economy.

Tory election planners are also discussing how to neuter the impact of Mr Brown's appearances on the world stage in the run-up to the election. He will attend next month's Copenhagen summit on climate change and plans to host an international conference on Afghanistan in January and an international investment conference in London in February. He will attend a Washington summit on nuclear disarmament called by President Barack Obama in March ahead of a review of the Nuclear Non-Proliferation Treaty.

This week senior Tories are making a series of announcements on the environment in an attempt to stop the Prime Minister monopolising the issue.

The shadow Foreign Secretary, William Hague, will argue that climate change is an urgent security concern as well as an environmental one.