Replace the cable. It's not worth having a lump in the middle!
If it isn't rubber cable now, you won't regret trading up if you can (and for a longer piece, too), provided the new cable can be made to fit the sander's strain relief.
Rubber cable tends to be a bit thicker for a given current rating, so it might need a new strain relief bushing - adapting the sander's casing to fit the bushing is probably the easiest route. You can get bushings and cable from RS, Farnell/CPC, and even Amazon these days, and eBay, of course. You can also still get rubber mains plugs, or at least flexible ones, and they are not expensive, although the cable might be.
If fitting a thicker cable, don't be tempted to cut off the outer sheath outside the sander - it really must be clamped inside securely (at least with one or two small cable ties). So the closer the match, the better.
If the above seems daunting, you can probably get a made-to-measure cable set, complete with tails for inside the tool, strain relief and probably a moulded 13A plug, from someone like
Miles Tools (MTMC) in Yeovil. I doubt it will be inexpensive, but it will be an easy replacement.
Note that some power tool trigger swiches have a gripping blade arrangement inside - the wires of the power cord are pushed in and gripped. To release the old cord you need a small (Jeweller's sized) screwdriver - there are usually little holes on the switch adjacent to the wires going in, and carefully poking into these releases each wire. It varies though - if in doubt ask MTMC's technical department (or your spares supplier of choice), or post a photo here.
Final thought: Power tools nowadays tend to be "double insulated," i.e. with no earth in the cable at all. Your cable looks like it's that type (I can't see an earth wire in your picture).
If all you can find is three-core rubber cable to repair with, it's not a disaster: Wire the earth to the big pin of the 13A plug as normal, but cut it off with the outer sheath at the cable clamp in the tool (so only live and neutral continue to the switch). Don't leave an earth "tail" loose inside the tool!
In my view having an earthed cable is slightly safer than just two cores, since if the accident ever repeats, you probably will trip the RCD fast and not blow the fuse (slower). It's an extra protection, even though it changes nothing inside the tool itself.
E.