Labour likely go to the country on same day as local elections in England as budget date confirmed

This article is more than 10 years old

This article is more than 10 years old

The Treasury will announce the budget will be held on 24 March, making 6 May a racing certainty for the general election.

The timing is likely to mean parliament debating the budget in the week of 29 March. Gordon Brown could then go to Buckingham Palace to call the election on 6 April, after the Easter holiday weekend. MPs and peers would spend a short time in parliament to negotiate remaining bills.

A 6 May election, on the same day as local elections in England, has for some time been regarded as the favoured date. But it runs the risk for Labour of seeing critical first-quarter growth figures published in the final fortnight of the campaign.

Ministers are increasingly optimistic, however, that the figures will not reveal a slide back into recession.

It is not expected that the chancellor, Alistair Darling, will have to reveal major changes to growth forecasts or the size of the public sector deficit.

He may have some cash spare from lower-than-expected unemployment forecasts.

In a speech in London Brown is expected to confirm a cap on public sector pay rises despite civil servants gearing up for strikes in the run-up to the election. Brown is expected to use a speech on the economy to reaffirm the government's position as set out in last year's pre-budget report.

He will tell public sector workers that from 2011 those at the higher end will see an absolute pay cap and that 700,000 middle-ranking civil servants, including police officers, nurses and teachers, will have pay rises capped at 1% for two years. That could amount to a real-terms cut.

The plans for senior public sector workers would affect 40,000 GPs, hospital consultants, Whitehall's highest paid civil servants and the chief executives of quangos.

When he announced the plans, the chancellor said the move would save the exchequer £3.4bn a year. Darling has written to the salary review bodies calling for a freeze on the pay of the highest-paid civil servants and a cap of 1% for those in the middle.

The full details will be published tomorrow, including exemptions for armed forces.

Some 200,000 civil servants ranging from 999 operators and coastguards to court workers began a 48-hour strike on Monday. Driving tests have been cancelled and police officers called on to man 999 emergency lines in London.

Yesterday the Policy Exchange thinktank published research showing that public sector productivity fell nearly 4% in the decade after 1997, while growing by 23% in the private sector.

Neil O'Brien, director of Policy Exchange, said: "Despite this, pay has risen by 15% more than in the private sector. The simple truth is that we need public services run on 21st century principles – not the rules of the 70s."