DILEMMAS are the stuff of government and, after a dreadful week on the economic front, the two Conservative contenders will already be pondering the crossroads ahead should they successfully complete the Tory leadership assault course and enter Downing St.

The political predicament staring the winner in the face will be whether to cut and run for a snap General Election or go long and hope the economy recovers well enough by 2024 to provide the Conservatives with a decent chance of winning power again.

Path to sure footing

On one of the TV head-to-heads, all the candidates appeared to dismiss calling a snap poll but given the new, concerning circumstances, the victor could always change their mind and decide to go to the country early.

Inflation is already at 9.4%, the energy cap is due to rise to £3,240 in October and it could be that, by November, it will be confirmed the UK has slumped into a recession or, at the very least, is on the verge of one.

The Bank of England is forecasting inflation to hit 13% in 2023 and for the country to be in recession for the entirety of next year. The energy cap could top £4,000 in January.

So, things are going to be miserable for millions of people from this winter.

Calling a quick election would at least provide some certainty about the short-term economic outlook. Liz Truss and Rishi Sunak already have a good idea of what the lay of the economic landscape will look like in the autumn.

In this scenario, both candidates would bring forward a Budget to late September ahead of the conference recess, dissolve parliament and then use the annual Tory get-together in Birmingham as a springboard into a short, intense election campaign.

In the case of Truss, we know she plans to shower voters with early tax cuts to provide a feelgood factor amid all the gloom.

The Conservative pitch will be that it is best-placed to steer the country through choppy economic waters and get it through to the other side; just like it did with Covid.

Yet calling a snap election would come quickly on the heels of Boris Johnson’s departure over the issues of integrity, trust and honesty; bridges that, for many voters, would in October remain badly broken.

Labour hot on the heels

Recent opinion polls have suggested since December 8 Labour has been ahead in all but one with recent leads, averaging around 9%; a number Tory HQ might not regard as insurmountable.

Then, there is Keir Starmer’s political discomfort over the continuing strikes, which would be exploited by the Conservatives in an election campaign.

And, as always for a new PM, there will be the nagging thought that they need a personal mandate from the electorate.

Gordon Brown famously “bottled” a snap poll in 2007 after becoming PM and subsequently lost the General Election three years later. Theresa May, who ruled out an early poll after becoming PM in 2016, changed her mind 12 months later but saw the Lib-Con Coalition’s robust 78 majority reduced to an insipid Tory one of just 12. She was gone two years later thanks to the Brexit rebellion led by her Downing St successor.

Of course, the Bank and other analysts, whom Boris Johnson would doubtless dismiss as “doomsters and gloomsters,” could be wrong; forecasters often are.

Indeed, Truss has repeatedly insisted the country would only face a slump if it carried on with its business-as-usual economic policies, condemning the Treasury’s “abacus economics”.

Pointing to her plan to reverse the National Insurance increase and temporarily halt the green energy levy to help people with their fuel bills, the Foreign Secretary told the leadership hustings in Eastbourne on Friday that the most important thing was “getting the economy going, so we avoid a recession”.

Taking a swipe at Andrew Bailey, the Bank Governor, the Norfolk MP insisted: “I know there are difficult forecasts out there but forecasts are not destiny. And what we shouldn’t be doing is talking ourselves into a recession. We should be keeping taxes low.”

But her plans are predicated on £30bn-plus of “fiscal headroom,” which some analysts suggest, given the turbulent economic outlook, might not materialise.

An election will be a way to legitimise the winner of the leadership contest

Sunak, meantime, seems adamant that he would not call a snap poll because his emphasis is first and foremost getting a grip on inflation, which will take some time to achieve.

Highlighting how the Bank’s big fear was that inflation would become embedded in the economy, the ex-Chancellor told the Eastbourne hustings: “If we don’t get a grip of this thing and get a grip of it fast, then we can kiss goodbye to winning that next election. So, the first thing to put ourselves in a position to win is to get through inflation and get through it quickly and not[make] things worse.”

Risky business

Whichever way the new PM decides to go on a snap election – and there will be plenty of people advising him or her on the merits and demerits of either option – one thing will be on their minds; the notion that going in October and losing would mean they would be in Number 10 for barely two months; a humiliatingly short tenure, which would easily beat the record for the shortest set by Conservative premier George Canning, who lasted just 119 days before his death in August 1827.

At least going long to autumn 2024 and losing would give the new PM the consolation of having been in power for two years and would avoid any negative reaction from the public to cutting and running.

Which makes me think that whoever succeeds Johnson in September will decide against going short in the hope that their economic plan will - somehow - turn out to be the right one, thus enhancing rather than diminishing the Tories’ chances of winning a fifth term.

In the end, though, only the new PM can make the call and hope it’s the right one. Assessing risks and taking a gamble are also the stuff of government.