The British Conservative Party has just met for its national convention in a state of crisis.

Recently, two large polls have shown a huge resurgence in left-wing sympathies among British voters. They reveal that support for nationalization, regulation, and increased taxation have penetrated deep into the right-of-center demographic, including among older people and previous Conservative voters. The party is already running a minority government following an unexpected mauling from young voters in this year’s general election. Many are now speaking of being on an opposition footing, which will in turn handicap Prime Minister Theresa May’s efforts to negotiate Britain’s exit from the European Union.

The first blow came last week when the highly respected Legatum Institute released data showing three quarters of respondents approved of nationalization of key utilities. Half sought the nationalization of the banking sector, a prospect not raised since the economic crisis of the 1970s. Taxation and government spending are now prioritized over allowing voters to keep more of their earnings. Capitalism is perceived as “greedy,” “selfish,” and “corrupt,” even among Conservative voters. The report concludes that the free market in the UK has the brand personality of “an organisation in acute reputational crisis.”

As Conservatives digested these findings, they were hit by a second body blow. A poll that counted 20,000 respondents found that the opposition Labour Party had a lead of up to 35 percent on questions such as which party “wants to help ordinary people,” “has its heart in the right place,” and “stands for fairness.” The Conservatives were ahead on only two positive sentiments: “tough decision-taking” and “competence.” Even on the latter—the central ballast of Conservative appeal for decades—they were only marginally ahead. The response had collapsed since the same question was asked a year ago. A negative direction is also found comparing these results with another poll conducted as recently as June that found “only” 48 percent backed higher taxation.

This is a sucker punch to a Conservative Party that’s brought unemployment down to record levels in spite of Brexit uncertainty. The public hostility was driven home when an opposition activist handed the Prime Minster a “fired” notice during her keynote convention speech on Wednesday—a far cry from the brush once handed to Mrs. Thatcher in reference to her promise to “sweep Britain clean of socialism.”

The leftward pull across British politics is being driven partly by a resurgent hard-left Labour party—but there are also deeper systemic problems at work. Chief among these is an accommodation crisis. London’s open-door policy to foreign capital—brilliantly satirized here—inflated house prices hugely, putting home ownership out of reach for all but the highest-paid mortgage buyers. Since the financial crisis, jobs and wages have suffered even more, while quantitative easing has mostly helped those already with assets.

The result is that home ownership, which voters have repeatedly been told is a core Conservative principle, has become a distant prospect for the younger half of the population. In such an environment, left-wing offers of short-term living support outweigh an increasingly abstract center-right program aimed at creating asset owners. The prime minister has now promised to “get the government back into the business of housebuilding,” while making similarly expansionist commitments to state control of energy prices.

These policies mirror the ongoing, old-style revival in the Labour Party. Its Marxist leader Jeremy Corbyn uses the luxury of opposition to make hundreds of billions of unfunded spending commitments. At the Labour national convention, delegates raised their fists and sung “The Red Flag.” Corbyn conducts economic “war games” to prevent capital flight in the event of his party’s victory, while airbrushing rampaging anti-Semitism and misogyny. Yet he succeeds in presenting a compassionate face, claiming to represent tolerance, diversity, and the economic majority.

This confronts the governing Conservatives with an impossible situation. Although they are already responding in kind, they cannot follow Labour down the rabbit hole of unfunded commitments without undermining their own fiscal and political narrative. An example is the tuition fees that British students must pay to attend university, which Labour says it will scrap. The Conservatives have responded by raising the threshold at which students must repay these loans, a U-turn that still pales in comparison to Labour’s promise of free education for all. Yet the alternative tack—to restate core conservative principals of individual freedom and responsibility—opens them to wider accusations that they lack compassion.

Labour’s “diversity” attack presents a similar dilemma. In spite of having furnished Britain with two female prime ministers, the Conservatives are targeted as being too white and too male. Yet taking a top-down approach to diversity, as the previous administration did, both acknowledges and takes ownership of a supposed problem that can never be resolved to the satisfaction of Labour agitators. They are further hindered by both party membership and party discipline having collapsed. Labour’s revolutionary focus has resulted in a party membership of over 570,000—the largest in Europe—and Soviet-style discipline at the top. Conservative membership could be as low as 100,000, as party infighting sees Foreign Secretary Boris Johnson capitalize on his media recognition to destabilize the prime minister, especially in the key area of Brexit negotiations.

The Conservative Party is engaged in deep and effective soul-searching. There is a recognition that the corporatist drift in British politics has forgotten Adam Smith’s own definition of a free market: one in which participants both gain the benefit and pay the cost of their activities. A mendacious version of neoliberalism has too often seen costs externalized onto workers or the state—not least via massive bank bailouts—while businesses retain the proceeds. Radical conservatives are now remembering their mandate to take up arms on behalf of the individual against such incrustations of vested interest.

An appetite for renewal is mirrored in the polling data. One graph reveals that, whereas voters associate their personal priorities with Labour, they still associate national priorities with the Conservatives. Key issues such as free trade, austerity, and automation evoke mixed responses. The main battleground remains their attitude towards business. Throughout the EU referendum campaign, voters were battered with “Project Fear” scaremongering by the Remain side that insisted businesses would leave with Brexit. In spite of that very real warning, most poll respondents still agreed that “Britain would be a better country if businesses made less profit.” The danger of pursuing this sentiment is too readily seen in the sharp concerns business organizations have already shown over the promised cap on energy bills.

The nightmare scenario is that Labour takes power just as the moderating influences of the EU—such as rules on antitrust and state support—are removed. Under those conditions, they would very quickly turn Britain back into “the sick man of Europe” (its nickname when Jeremy Corbyn’s intellectual forebears were in power during the 1970s). European capitals already want companies to relocate, while Eurocrats are tempted by the prospect of Britain failing as warning to other potential apostates. Labour governance could turn that nightmare scenario into reality.

The Conservatives need four pillars to fight back effectively. They need to allow for some Labour-lite policies and begin another cultural overhaul, both of which they’re already doing. They must also fill the space left by Labour’s regressive ideas vacuum with a wide-open program of political entrepreneurship. Lastly, they must paint a detailed picture of what Jeremy Corbyn’s Britain would look like. The last Project Fear didn’t come true. This one very definitely will—and people need to know.

Toby Guise is a London-based writer and novelist who specialises in political culture on both sides of the Atlantic. His other work can be found here.