It is a place inhabited by "ordinary people with suburban dreams who worked hard to improve their homes and their lives; to get gradually better cars, washing machines and televisions; to go on holiday in Spain rather than Bournemouth", in the words of the new Labour strategist Philip Gould. It is where homes are anxiously owned, families are raised and crime is feared. The Daily Mail lies on the doorsteps. It is where contemporary British elections are won and lost. And it casts a powerful spell over marketeers, pollsters, journalists and - above all - politicians. It is, of course, "Middle England".

When Gordon Brown praises "hard-working families" or when David Cameron takes the axe to inheritance tax, they are assumed by headline-writers to have their eyes trained on this semi-mythical land. It represents, we are supposed to assume, the very heartland of the nation. As such, it acts as a kind of political bull's-eye: if parties can aim their policies directly at Middle England, the electoral match will be theirs.

Middle England is also frequently assumed to be insular, selfish, xeno phobic, homophobic, anti-welfare, anti-Europe and generally resentful. It is the place where Thatcher's children moved to when they grew up. But if Middle England means anything at all, then its inhabitants are in fact more numerous, more diverse and considerably more liberal than the stereotype. Middle England reads the Mail, but does not agree with it.

Ian Hislop, researching his BBC radio series Looking for Middle England, found Lord Salisbury using the term in 1882, but it did not seem to have caught on. The historian David Cannadine records in his Class in Britain that it was Mrs T herself who introduced the term into the modern political lexicon - apparently copying Richard Nixon's conjuring of "Middle America". Politically, Middle England denotes a set of voters, presumed to have mainstream attitudes, who are also disproportionately likely to be swing voters in marginal constituencies. Martin Jacques has complained that Middle England is a "metaphor for respectability, the nuclear family, conservatism, whiteness, middle age and the status quo".

One of the fears of liberal-left commentators, who unfailingly use the term disparagingly, is that national politics is being driven by the neuroses of an insular, unrepresentative group of a few hundred thousand people. It is certainly true that those in Brown's team are obsessively interested in the views of this group, and that Lord Ashcroft is pouring money into winning their votes, but they are not political freaks. Their views may not be those of New Statesman readers - but they are roughly representative of the nation. They voted Tory until 1997 and have voted Labour since, though with misgivings in 2005. They are non-graduate families in which both Dad and Mum work to pay the mortgage. They read the tabloids but get their news from television, and are utterly uninterested in party politics. They water their neighbours' plants when they are on holiday and keep an eye on the old lady over the road. The only manner in which they differ significantly from the norm is their unusually high, and largely irrational, fear of crime.

Ben Page, managing director of the MORI Social Research Institute, says that the label Middle England is used as "a convenient shorthand for the 25 per cent of the population who are not surgically wedded to one of the main parties - and who happen to live in marginal constituencies". For this group, party commitment is weak and the impression made by an individual leader is strong. Policies are generally weakly linked with voting intention - unless they push the right buttons.

The Conservative pincer movement to lower both stamp duty and inheritance tax played beautifully with them because of their powerful relationship with property: they are the first in their family to own a home, and fear that they will be the last. The rise in house prices threatens to price their children out of the market. This is also the group with the darkest memories of Black Wednesday, negative equity and repossessions. Even if they were not personally affected, they know somebody who was. It is true that inheritance tax is extremely unlikely to affect them - but it also offends one of their strongest instincts, which is to see their kids right.

Geographically, Middle England means suburbs - in the south and the Midlands. There are moments when "Middle Britain" is preferred by Labour politicians, but Scotland and Wales do not feature in any of the social, spatial or psepho logical categories that command the attention of the political classes. Middle England is Metroland - the areas traversed by the Metropolitan Line: Pinner, Ruislip, Hillingdon - writ large across the English nation. It is Essex Man, or Worcester Woman, but never Merthyr Man or Galloway Girl.

In terms of social status, Middle Englanders are what pollsters and marketing analysts call C1s and C2s, otherwise the lower middle class and skilled working class, though analysts at the purer end of the market don't like such labels. "Categorisations always carry the danger of being misleading," says Miranda Phillips from the National Centre for Social Research. "Middle England is a phrase used in the press and politics, rather than in social research. On balance, I think Middle England is likely to be a misleading categorisation. It is simply not that straightforward."

The university effect

It certainly is not. Class, status and attitudes relate to each other in complex and changing ways and there are many dangers in our apparently insatiable desire to put ourselves - and especially other people - into tidy boxes. Nonetheless, certain key trends are fairly clear. More people are middle class, and more people think of themselves that way; the relationship between social class and both political identification and social attitudes is weakening; and - most interesting of all - the group that can plausibly be defined as being in the "middle" is both more liberal than the stereotype suggests, and becoming more so with each passing year.

Forty per cent of the population now define themselves as "middle class", up from 30 per cent four decades ago. The final numerical triumph of the bourgeoisie is at hand: as Professor Anthony Heath has written: "In 1964, for every person who called themselves middle-class, there were 2.1 who said they were working-class. Now that ratio is just 1:1.5." Even John Prescott is middle-class now, remember. As the number of unskilled labourers has diminished, the proportion of the adult population classified as C1 or C2 or equivalent has reached 22 per cent, up from 18 per cent in 1983 - a significant expansion in socioeconomic terms.

Profound shifts are taking place in attitudes, too. The lazy stereotype is that Middle Englanders lack the lofty liberalism of their AB cousins, but the evidence often suggests otherwise. In a Populus survey this year, for example, 42 per cent of respondents in social classes AB agreed that "children brought up by a single parent are more likely to get into trouble than children brought up by married parents", compared to 37 per cent of C1s and 28 per cent of C2s.

Over time, Middle Englanders have become more tolerant and open-minded. According to data prepared by the National Centre for Social Research, the pro p ortions of C1s and C2s who think that "sexual relations between two adults of the same sex" are "always wrong" are 23 and 30 per cent, respectively - down from 38 and 56 per cent in 1983. The current figure among those from social class A is 17 per cent.

Widening access to higher education has played a part: one of the best predictors of socially liberal attitudes is level of edu cation. Universities have been opened to the masses, to the dismay of über-conservative commentators such as Digby Anderson, who asks in his pamphlet All Oiks Now: the Un noticed Surrender of Middle England: "In what ways do the middle-class students differ from the others? They certainly look the same. It is difficult to tell the daughter of a doctor from the daughter of an unemployed miner, indeed sometimes from the son of an unemployed miner." His Middle England, it should be noted, is entirely upper-middle-class.

In the 1960s, a fierce academic debate raged over the "em bourgeoisement thesis" - which stated that, as the working class became more affluent, they would detach from their proletarian peers, lose class consciousness and adopt the attitudes and values of the middle class, in particular with regard to party and trade union loyalty. (Anderson fears that the opposite process - de-embourgeoisement, perhaps? - is the actual result.) The famous sociologist John Goldthorpe, in his masterpiece The Affluent Worker, showed that, in terms of social networks, even well-off workers remained true to their roots, but that their political opinions did begin to alter. In particular, their support for the Labour Party became contingent, rather than given. In some ways, the politics of the rest of the century flow from this fact, and Labour's long failure to grasp it. Where it is clear that embourgeoisement does apply is in social attitudes; affluence has brought toleration in its wake.

Muddle England

One reason why commentators miss the rising liberalism of Middle England is that they make the mistake of looking at what they read, and assuming they agree with it. It is true that Daily Mail readers are more likely to vote Conservative - but to a lesser extent than Mirror readers are more likely to vote Labour. And while it is also true that 46 per cent of Mail readers think that immigration is one of the most important issues facing the country, 44 per cent of Financial Times readers do, too. On many social issues, the readers of the Middle England tabloids are more liberal than the population at large, especially the younger ones. The views of Mail readers are not facsimiles of the paper's editorials. There is no clone army of Paul Dacres roaming the suburbs.

What is stalking the land is anxiety and fear, especially about money. Middle Englanders are under huge financial pressure. Wages in the middle-income range have ticked up painfully slowly over the past decade - which may be one reason why Middle England supports moves to hit the unearned wealth of private equity barons and the untethered wealth of the "non-doms": again, a truth the Tories divined before phobic Labour ministers. Their concerns about immigration are primarily economic, rather than straightforwardly "racist".

The fears of Middle England are not always consistent, or rational. Ben Page has decided that the public is suffering from "cognitive polyphasia", a diagnosis that means "people are holding lots of conflicting ideas": more muddle England than Middle England. The majority think immigration is a big problem, but only a small minority say it is a problem affecting them. Middle England, he says, is also "a bit Pooterish - a bit Margo from The Good Life; they are conservative but with a small 'c'". They may well be fiscally conservative, but they are mostly socially liberal. Their high fear of crime may stem from their position as the first middle-class members of their family: now they have something to lose.

As with all sociopolitical categories, the edges of Middle England become more blurred as you approach them, the inhabitants as hard to pin down as those of Middle Earth. Middle Englanders certainly do not recognise the "long shadows" falling across county cricket grounds and the "old maids bicycling to Holy Communion" evoked by John Major; but nor did they make much of the tortured attempts of early new Labour to conjure a "Cool Britannia".

Middle England is sceptical of party politics, yes. Fearful about crime and immigration, certainly. Instinctively desiring to hold on to its own money rather than give it to the Treasury, you bet. Much of which is because Middle England is a more precarious place than the lands above, where professionals and the rich can insulate themselves against risk, and below, where there is less to be lost in any case. But Middle England is not nasty. Indeed, it is a broad-minded kind of place. And to the extent that it really is the soul of the nation, this can only be cause for celebration. For the liberalisation of Middle England might represent the final triumph of liberalism itself.

Illustration by A Richard Allen