Will Brown be ‘bounced’ into an early election in spring 2009?

The growing evidence of a 'Brown' bounce from the financial crisis is raising speculation at Westminster that the PM could go for a general election a year earlier than expected. A poll next spring suddenly looks more attractive to Gordon Brown after the Populus poll for the Times put Labour five points up on 35 per cent while the Tories are down four points on 41 per cent. The Liberal Democrats are up one on 16 per cent.

Brown will go to the world economic summit at the weekend in the role as global Superhero armed with an action plan to avert a global financial meltdown. He is calling for more coordinated action across the world to boost economies, and to avoid protectionism pushing the world into a global financial winter of recession.

His MPs are suddenly seeing some chance of saving their own seats from inevitable defeat. One Blairite MP told the Mole: "David Cameron appears to have shot his bolt and Brown is beginning to look like a plausible leader for a crisis. I wouldn't be surprised to see him go for it next year."

An early general election would raise suspicions that Brown knows how bad things will actually get and is planning on calling an election at the most politically advantageous time. He is also personally scarred by the on-off snap election last year shortly after he took over from Blair.

But the IMF have warned that Britain is about to enter a worse recession than most other countries. Unemployment is already touching 1.8m and benefit costs are soaring, sucking money from much-needed public spending programmes and inflating the borrowing figures.

Brown's new team of advisers including Alastair Campbell and Peter Mandelson are keeping their options open on a 2009 general election. The Mole's advice is don't listen to anyone saying it has been ruled out. Brown will go to the country when he thinks he can win, and 2010 looks like being a year of pain. Better to give the electorate hope in 2009 than ask them to vote for you when you are already out of work.

The Liberal Democrats are also suffering from the two-party squeeze in spite of their economics spokesman Vince Cable running rings round the Chancellor Alistair Darling. Nick Clegg, the Lib Dem leader, has looked lacklustre and yesterday was reduced to complaining that Brown was "playing smoke and mirrors with the electorate".

Cameron meanwhile accused Brown of preparing a "tax con" when he launched his own version of tax breaks to get Britain out of recession. The Tory leader proposed using credits on National Insurance contributions to persuade companies to hire more workers from the dole queues, funded by savings in unemployment benefit.

He urged Gordon Brown to adopt the idea in the forthcoming Pre-Budget Report due next week. The proposals are a sign that the Conservatives are putting 'clear blue water' between themselves and Labour over the economy's ails. Cameron warned that the room for raising more money through borrowing from the City is limited, in stark contrast to signs from Gordon Brown that he is willing to countenance a Keynesian spending 'splurge' to drag the country out of recession.

Yesterday in a GMTV interview, the Prime Minister gave a broad hint that plans to cut taxes were being drawn up, although reports that the reductions could total up to £15bn have been downplayed. The Chancellor’s Pre-Budget Report, which contain any tax cuts, is likely to come as early as Wednesday of next week, according to rumours circulating at Westminster.

Meanwhile the Treasury refused to comment on a Daily Telegraph report that the Government would delay the introduction of a planned above-inflation increase in road tax which would see the annual charge for some cars rise by £245."We do not comment on speculation about what is in the Pre-Budget Report," a spokeswoman said. You can take it from the Mole that means it is right.

THE MOLE: PRE-BUDGET REPORT

FIRST POSTED NOVEMBER 11, 2008