As the former chancellor who presciently warned in last summer’s leadership contest that Liz Truss would destroy the economy, Rishi Sunak’s calm competence is intended to be his key selling point in the election.
But after Thursday’s half-point rate hike by the Bank of England left thousands of voters facing huge mortgage hikes, a shirtless hawk stepped down to insist he was “absolutely , 100% of it” when it comes to fighting inflation.
With a general election looming in 2024, many of those likely to be hit the hardest — as cheap mortgage deals expire and force borrowers into rates of 6% or more — are among those seat held by the Conservatives in 2019.
The hit to income for those affected is likely to be significant: an analysis by the Institute for Fiscal Studies earlier this week showed that almost 1.4 million people – 690,000 under 40 – would see their disposable incomes fall. by more than 20% as they roll off mortgage deals.
And unfortunately for the prime minister, many of those likely to be worst affected are concentrated in the seats he wants to hold in 2024.
The Liberal Democrats’ analysis of the proportion of mortgage holders in each constituency across the country shows that third highest on the list is Mid-Bedfordshire – where one in four unwanted byelections will take place in the coming months.
Other constituencies in the top 10 for mortgage holders are Dominic Raab’s constituency of Esher and Walton – which he has decided not to fight – as well as Cheadle and Wokingham, all of which are on the leader’s list Lib Dem Ed Davey won Tory seats. .
“If you look at the map of the worst hit areas, they are all blue walled commuter belt areas, and they tend to be ultra-marginal,” said a Lib Dem source.
Of the top 50 seats with majority mortgage holders, 48 out of 50 are now Conservative, many with narrow majorities.
And as election expert Patrick English put it in a recent blogpost, “when a large proportion of voters in a constituency apply or renegotiate debts of around during a general election and facing high rates at levels not seen since the 1980s, they will not be able to reward the governing Conservatives for the financial pain it will cause them”.
Davey and Keir Starmer worked hard to ensure that public associate Sunak and his party were in the mortgage mess, just as George Osborne and David Cameron blamed Labor Prime Minister Gordon Brown for the 2008 financial crash. .
As Davey said on Thursday: “Homeowners are being treated as collateral damage by Rishi Sunak. This latest rate hike will hurt family finances for years to come, all because it that Conservative government is destroying the economy.”
Labor hammered home the slogan “Tory mortgage penalty” to recognize the steep rise in repayments many face.
The party has even created a online ad cheek to the famously infamous Conservative election posters from 1992 warning of “Tax Taxes to Labour” – this time with the slogan “Tory mortgage bombshell” and a large black warhead emblazoned with the message: “You’re paying £2,900 more a year under the Tories.”
Sunak sought to deflect Starmer’s taunts about mortgage rates at prime minister’s questions on Wednesday by pointing to the fact that inflation is high around the world, but Labor strategists think it holds little water in voters – especially when the prime minister has made halving inflation one of his five pledges to take office.
“Voters tend to think it’s not the government’s fault but it’s their responsibility,” said a Labor adviser. “I don’t think blaming the world’s causes is a winning argument. There is a feeling that the government has bad things, in the round. “
Martin Lewis, the consumer finance campaigner, urged the government to do more and focused on increasing banks’ profits, adding that ministers must take responsibility.
Cheap borrowing, with an interest rate of less than 1% for 13 years from March 2009 to May last year, helped to hide a long period of stagnant wages and deep cuts in public spending, which now it feels so good.
Some in Westminster are questioning whether Sunak’s plan to wait until late 2024 for an election is a good bet now that rates are expected to remain much higher than previously thought.
But election expert Rob Ford, speaking for the academic network UK in a Changing Europe, said the prime minister was likely to continue to wait in the hope that things could change for the better. good or fresh events that reach the current crisis.
“Micawberism and wishful thinking are extremely powerful forces – and the more negative outcomes you face, the stronger they tend to be,” he said. “The belief that something can happen to make these things go away can be hard to shake for these people.
“In this parliament so far, we have had two events that have completely raised the entire political agenda: the pandemic, and then the invasion of Ukraine and the subsequent cost of living crisis. Who can speak with even what confidence will the next year and a half bring? Nobody knows.”
