The Conservatives are in danger of underestimating the scale of their electoral predicament, political strategists have warned, as the cost of living crisis is forcing the party’s core voters to cancel holidays and leaving them in fear for their livelihoods.
New focus group evidence on the economic plight of “Blue Wall” middle-class Tories has led one expert to predict that the party faces “electoral annihilation” if it fails to address the issue.
Tory MPs have long held onto the hope that, with at least a year still to go until the general election, there will be enough time for the party to turn their fortunes around and secure an unlikely victory at the ballot box in 2024.
Ministers regularly point to the remarkable feat of escapology carried out by John Major at the 1992 election, which saw the Conservatives clinch an unexpected win over a resurgent Labour party.
But academics and political strategists have started to paint a very different outlook for the party as a result of what has been described as an “unprecedented” set of economic shocks that have caused fissures in the bedrock of traditional Tory support.
Ed Dorrell, partner at political strategy firm Public First, recently carried out a series of focus groups of lower middle-class voters in the Home Counties, who voted for Boris Johnson in 2019, that will be a cause for significant concern for the Tory leadership.
He said that the country will have a better sense of the Conservatives’ political situation after the by-election results this week, which he said “may yet give the Tories hope”, despite current polling.
But he told i: “I get the impression that the Conservatives don’t yet seem to understand that the economy improving by 1 per cent will not have a huge tangible impact on people’s pockets – at least in the short or medium term. There is always a lag, particularly when it comes to how much people’s mortgages are, or how much they are paying for goods in the supermarket.
“Prices will still be much higher than what they were, mortgage repayments will remain very high and wages are likely to lag behind.”
Carrying out the focus group, he said he was struck by the gloomy prospects voiced by each of those taking part.
“There are now lots of voters who should be instinctive Tories who feel very poor in a way they haven’t before. And instinctive Tories feeling poor is very bad news for the Conservatives,” Mr Dorrell said.
“They are what I would call ‘Tebbit Tories’, who would admire Margaret Thatcher. These are people who have started their own small businesses, plumbing firms, electricians, who are now saying they are unsure how they will survive next year.”
He said that some members had been forced to cancel their summer holiday abroad and highlighted one member taking part in the focus group, who admitted: “I now head to Aldi for bargains. The days of Waitrose are long gone.”
Another focus group member said: “A couple of years ago I thought we were working quite hard and doing ok. Now I’m worried we might actually be poor.”
Mr Dorrell believes this could have disastrous consequences for the government. “If the Tories are not careful, they’re looking at electoral annihilation,” he wrote in an article for the CapX website.
The freefall in traditional Tory voters’ living standards coincides with the precipitous rise in interest rates, which has ramped up mortgage costs, while inflation has remained stubbornly high.
Of particular concern for Rishi Sunak and his Chancellor Jeremy Hunt is that around one million mortgage holders will see their monthly mortgage costs increase by £500 by 2026, the equivalent of a £10,000 cut in people’s annual wages, going on assumptions of homeowners’ salaries based on the size of their mortgages.
It means the mortgage pain being felt for homeowners, who are more likely to be Tory voters, will still be felt by the next election.
“Few economists seem to believe that mortgage rates will start going down substantially by the time of the general election next year and could still be climbing,” Mr Dorrell told i. “Unless something miraculous happens for the Conservatives – or Keir Starmer somehow implodes – this will likely spell disaster for Rishi Sunak.”
Despite this, some Tory MPs believe the mortgage crisis is either not affecting their constituents, or perhaps more surprisingly, being overplayed by the media.
One Tory backbencher representing an outer London constituency told i: “The mortgage issue hasn’t been raised with my office at all, the new affordability checks introduced post-2008 seem to have worked in that households have been ‘stress tested’ against rises like we have seen already.”
Although the MP added: “For new buyers who have lost cheap rates it’s incredibly frustrating.”
The comments were echoed by a former minister in a Tory/Labour marginal in the South East, who insisted the issue was not being raised by their constituents.
“Everyone understands the risks of rate rises when they take out a mortgage. It is entirely driven by the opposition and media,” the MP said.
Others within the Government are holding out for a repeat of what happened in 1992, as they look for a narrow path to power next year.
One Cabinet minister told i that the perception of both Mr Sunak and Sir Keir Starmer as being similar “responsible managers of the country” means voters may be willing to stick with the incumbent “because we think these guys will get us out of the economic mess”.
“In ’92, we were in a recession and the economy was in a terrible bloody mess,” the Cabinet member said. “Norman Lamont was the chancellor, and yet people were frightened to make the change to [Neil] Kinnock.”
According to Will Jennings, Professor of Political Science and Public Policy at the University of Southampton, said too many within Westminster can become “obsessed about drawing analogies rather than looking at what’s really going on”.
“One difference was that John Major was actually quite popular, his approval ratings were around +4, despite his party being at -30, while Neil Kinnock was not popular and was polling behind where Keir Starmer is now,” Professor Jennings said.
“But the bigger thing is the economic comparisons. The recession in 1992 was short and sharp. Recessions then were seen as reflecting the business cycle and did not hugely impact the reputation of the Conservative government.”
He added the economic situation is fundamentally different. “We’re in a period of wage stagnation since 2008 that is exceptional. It is unprecedented. Whereas before this was offset by a lower cost of borrowing, now interest rates are going up and wages are not keeping up,” Professor Jennings said.
What the Prime Minister and the Tory party can hope for is for voters to have short memories, and that by the general election next year people’s standard of living will not be any worse than now. “Maybe then they can sell a story that things are beginning to turn around.”