Making social science accessible

02 Jan 2024

Economy

Public Opinion

This piece by John Curtice is taken from our recent report “The state of public opinion: 2023”. Read the full report here

This government has faced a number of economic shocks. Confronted with the worse public health crisis for a hundred years, it was obliged, in March 2020, to put the country into lockdown. Then, as the pandemic receded, it took a while for supply chains to be restored, while the Russian invasion of Ukraine exacerbated the already rising price of oil and, especially, gas. The government found itself paying the wages of those who could not work during the pandemic, and then subsidising domestic energy bills during the winter of 2022-3.

Inevitably, the economy suffered. The country’s gross domestic product, which fell in the second quarter of 2020 to just 78% of its level in the last quarter of 2019, was only 2% above that level by the third quarter of 2023. Nominal wages fell during the summer of 2020, and while for some time thereafter wage growth outpaced price inflation, from late 2021 onwards the opposite happened.

Only in the summer of 2023 did increasing wage growth, fuelled by a tight labour market, begin to catch up with a falling, but still high, level of inflation. Although by July 2023 average wages were 20% higher than they had been in December 2019, so too were prices. Meanwhile, those with a mortgage have increasingly had to cope with a Bank of England interest rate that has risen from 0.1% during the pandemic to 5.25% now.

The public have noticed this economic doom and gloom. Since 1978, Ipsos have asked, ‘Do you think the general economic situation of the country will improve, stay the same, or get worse over the next twelve months’. The figure below shows, for both voters as a whole and 2019 Conservative voters in particular, the net level of optimism by this measure since the last election.

Apart from a brief spell in 2021, when the economy benefitted from an easing of lockdown restrictions, the public have persistently been pessimistic about  the state of the economy. Indeed, the level to which the index fell during 2022 as the ‘cost of living crisis’ started to bite (an average of -57 between March and December) replicated the level of pessimism during the financial crisis (-59 between March and September 2008), while the mood during the first lockdown in 2020 (an average of -50 between March and October 2020) was almost as dark. No previous parliament has witnessed such a persistently high level of economic pessimism.

True, those who voted Conservative in 2019 have always been less pessimistic than the general public. That said, for a while during 2022 even they were deeply pessimistic, while in 2023 optimists have only been slightly more numerous than pessimists. The level of economic pessimism among those who voted Conservative in 2019 is still high enough potentially to be costing the government plenty of support.

But how have voters rated the government’s handling of the economy? Early in the lockdown, more felt the government was handling the economy well than badly, and while the balance soon tilted somewhat in the opposite direction, the economic recovery in 2021 saw the government’s critics being balanced out by admirers.

However, as inflation began to bite towards the end of 2021, so the government’s economic reputation began to suffer. By April 2022 over two in three voters said the government was handling the economy badly. Even among those who voted Conservative in 2019, critics were now outnumbering admirers. While the government was able to avoid the blame for the immediate impact of the pandemic, it was unable to fend off responsibility for the subsequent cost of living crisis.

Its economic reputation took a further knock in the wake of Liz Truss’ ‘fiscal event’, which resulted in turmoil on the financial markets. In October and November 2022, over 80% were saying the government was handling the economy badly, a judgement that- momentarily, at least – was shared by Conservative supporters. Subsequently, evaluations have only been marginally better, while, as Jane Green notes in her chapter, voters are now more likely to feel that Labour, and not the Conservatives, are better able to handle the economy.

Using data from the British Election Study, we can directly examine the extent to which perceptions of the state of the economy have been associated with a decline in Conservative support. The following table shows, for each wave of the study’s fieldwork during this parliament the proportion of 2019 Conservative voters who say they would vote for the Conservatives again, broken down by whether they thought the economy had got better or worse over the last twelve months. It also shows the proportion who said that the economy had got a lot worse.

Three key points emerge. First, during the pandemic, Conservative voters’ perceptions of the state of the economy were largely unrelated to their reported chances of voting Conservative again. Those who said the economy had got a lot worse were only slightly less likely to say they would back the Conservatives again.

Second, the willingness of Conservative voters to vote the same way as they did in 2019 has declined irrespective of their perceptions of the state of the economy. Even among those who think the economy has not deteriorated over the last twelve months, only just over three in five now say they would vote Conservative again – well below the equivalent figure of 85% in May 2021. Pessimism about the economy is not the only reason for the sharp decline in the Conservatives’ fortunes.

That said and third, the perception that the economy is doing badly has recently been weighing particularly heavily on the Conservatives’ fortunes. Although fewer Conservative voters are gloomy about the state of the economy than at the end of 2022, those who are pessimistic prove to be as much as 30 points less likely to say they would vote Conservative again – a gap only previously matched at the end of 2021 when gloom was much less widespread than it is now.

Although it may not be sufficient, turning around the economy would certainly seem to be essential if the Conservatives are to have any prospect of winning the next election.

By John Curtice, Senior Fellow, UK in a Changing Europe, Senior Research Fellow, National Centre for Social Research, and Professor of Politics, University of Strathclyde.

The author is grateful to Keiran Pedley for his help in compiling Ipsos’ data on economic optimism.

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