The figures confirm fears within the Conservative Party that the 'feel-good' factor has failed to materialise despite the apparent upturn under way in the Tory heartlands of the South.
One senior party source said: 'By and large, the feel-good factor is not there. The feel-bad factor is not as bad as it was, but the gap between improvements in the macro-economy and family incomes has adverse political consequences.'
David Shaw, vice-chairman of the backbench Tory finance committee, said: 'The lack of the feel-good factor is reflected by the inflation figures.
'It may be we need 3 per cent inflation to win the general election.' Mr Shaw's Dover seat is the 16th most marginal Tory constituency in the country, and its unemployment rate over the past year has fallen by 2 per cent, far less than in many safer Conservative-held seats.
He blames local factors, including the impact of the Channel tunnel on the Channel ferries. He is fighting to stop the closure by the Ministry of Defence of the military school of music in Deal.
MPs in the top 10 Tory marginals may fare better. Unemployment has fallen more steeply in their constituencies: Vale of Glamorgan -5 per cent; Hayes and Harlington -16; Bristol NW -10; Ayr -6; Brecon and Radnor -9; Bolton NE -15; Portsmouth S -11; Norwich N -10; Corby -16; and Slough -12.
Labour strategists believe the Conservatives will not be able to recapture the feel-good factor.
'It doesn't mean that the voters will trust the Tories again. People who are returning to work still do not feel security in employment and many of the jobs which have gone are in the white collar sector, such as banking,' said a Labour spokesman.
That assessment may be valid. Some of the biggest falls in unemployment over the year were in seats, such as Newbury and Eastleigh, which the Tories lost to the Liberal Democrats in spectacular by-election defeats.
However, Conservative leaders believe the economic upturn did not have time to affect these by-elections. The Tory leadership will be comforted that the figures suggest the economic tide is turning in the Government's favour in the South, and the findings will encourage the Prime Minister to wait until 1997 before calling the general election.
Twenty of the 25 seats where the highest falls in unemployment were recorded between June 1993 and June 1994 were Tory-held. Three were Labour. Tory seats in the South now enjoying better fortunes witnessed some of the highest percentage increases in unemployment since 1989, among them a rise of 307 per cent in the South West Surrey seat of Virginia Bottomley, Secretary of State for Health.
Across England, Tory seats have been experiencing double- figure falls in unemployment, while many Labour seats have had falls of less then 10 per cent.
A total of 31 Tory seats in England registered falls of 20 per cent or more, possibly reflecting the more flexible southern economy.
The steep percentage falls in the South represent relatively small numbers compared with unemployment totals in northern Labour constituencies, but the impact of the trend, which is followed across the country, will be heartening for Conservatives.
As Labour has warned, the difficulty for the Tories will be turning the trend into votes for the Government at election time.
The figures also reveal how slowly the economy is recovering in Scotland.
Of the bottom 25 seats nationally, where unemployment is unchanged or has increased, 13 are in Scotland. Eight of the 25 are held by the Conservatives and only four are in England: Chelsea (Nicholas Scott), Waveney (David Porter), Derby North (Greg Knight, deputy chief whip), and Folkstone and Hythe (Michael Howard, the Home Secretary).
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