A cost of living crisis is “driving angst” among Conservative MPs about spring’s local elections, senior party figures are warning, as an overwhelming majority of voters in a survey reported that they had seen their costs rise faster than their income. With the Treasury examining an expansion of a scheme designed to help the poorest with their energy bills, influential Tories are already saying that the plan will be too narrow and that the party will suffer big losses in May’s elections. The elections, which take place across London, metropolitan boroughs and some county councils, are being regarded as the next major source of political danger for Boris Johnson. MPs are sounding the alarm because inflationary pressures are set to peak just weeks before voting takes place. Some Tories are already warning they will try to engineer a parliamentary clash with the chancellor, Rishi Sunak, to force him into action. “I think it’s fair to say that the cost of living is one of the things that’s actually driving angst amongst MPs,” said Lord Hayward, the Tory peer and respected pollster.
The MPs are conscious that the elections will be happening in the wake of increases in energy and national insurance charges due to come in three or four weeks earlier. “Large numbers of MPs have never been in a parliament where the government has been 15 points behind. This for them is a new experience to be even 6% or 7% behind, though the last two opinion polls have actually been better for the Tories,” Hayward said. “But certainly there is an angst amongst MPs who, confronted by 6% to 8% deficits, are looking towards their local elections.” The news comes as an Opinium poll for the Observer suggests households are already noticing price inflation. About 70% of voters said they had seen their cost of living increase more than their income over the last 12 months, despite reports of pay rises. A majority who voted Tory at the last election (57%) said they backed removing VAT from energy bills. One in eight voters (12%) would now describe their financial situation as “struggling”, up slightly from 9% from the end of lockdown in April. A huge majority of the public say they have noticed price rises. About 86% have noticed a rise in the overall cost of living, 83% a rise in grocery bills, 80% a rise in energy bills and 59% a rise in council tax. A likely remedy from the government will be an expansion of the £140 Warm Homes Discount aimed at the poorest households. However, Tories are already warning that expanding the scheme will be insufficient: some even suggested they would threaten to vote against this year’s budget without firmer action. “That is only for those on benefits, predominantly,” said one influential figure. “The just-about-managing are not helped. I hope that they introduce a green levy escalator that goes down when the wholesale energy price rises.” The government is receiving guidance that inflation could rise to as high as 7% if they fail to take action. Average annual fuel bills could rise from £1,300 to about £2,000 a year. “The whole timing of this cost of living increase, whether it’s caused by world factors such as energy prices or whether it’s caused by domestic factors such as increased taxes, is coming at a very awkward time,” said another party veteran. “Not only the local government elections, but just at a time when really everybody wants to sort of get beyond Covid. We’re all hoping that after this winter is over and Omicron doesn’t turn out as bad as everybody feared, we want to emerge from that and start to get our lives back. This whole cost of living thing – I think it’s going to become quite tricky for the government.” Energy regulator Ofgem is set to announce a rise of up to £700 in its price cap at the start of next month. Bills would increase from April, with the local elections set for 5 May.
Tories have been demanding a cut to green levies, the end of VAT on energy bills or a reversal of a coming increase in national insurance to ease the pressure. Labour has so far backed cutting VAT on energy bills, but is also under pressure to go further. Stephen McPartland, the Tory MP for Stevenage, said that family finances were like a “leaky bucket that is getting leakier and leakier”. He called for the energy price cap not to be increased. Lib Dem leader Ed Davey said there was now a “growing revolt in former Conservative heartlands against this government”. He added: “As we saw in North Shropshire, even lifelong Conservative voters are fed up with Johnson’s incompetence and lack of decency. His failure to act on the cost of living crisis is simply adding fuel to the fire.”