Back when it all began on 22 June 2010, the then Conservative chancellor of the exchequer, George Osborne, delivered what he described as “this unavoidable budget”. A package of savage spending cuts and painful tax rises lay at its heart. “Today we have paid the debts of a failed past,” Osborne said. “And laid the foundations for a more prosperous future.” The message was that the Tory-led coalition was riding to the rescue to put right the wrongs of 13 years of Labour government, and, after a short sharp shock of austerity, soon all would be a bed of economic roses. More than 12 years on, last Thursday at 11.30am, Jeremy Hunt was offering yet more painful medicine, and still little sign at all of rosier times ahead. In the short term taxes would have to rise again, this time by a massive £25bn, Hunt said, while spending would need to be reined in by £30bn. Inevitably there were consequences for the wider Tory agenda. Badly needed domestic reforms promised by successive Conservative prime ministers, such as those to social care, would have to be delayed for the umpteenth time, seemingly to save money. Funds for public services would be squeezed and plans to raise international aid shelved. There would be help for the poorest at home, with benefits and pensions being uprated in line with inflation, because without such a hike, at a time when prices were rising at terrifying rates, their plight would soon become intolerable. Despite this litany of economic failure and national decline, Hunt, the fourth Tory chancellor of the exchequer in as many months, nonetheless managed in his peroration to declare that the Conservatives remained the party to be trusted most with the economy. There was no need “to choose between a strong economy and strong public services” because, he said “with the Conservatives, and only with the Conservatives, you get both.” Opposition MPs gasped, and Tories cheered. But they could all see the glaring fault lines in the chancellor’s arguments. They knew Hunt’s task was twofold: to put the economy back on something resembling a sensible course after Liz Truss’s reckless mini-budget, while obscuring the obvious Tory culpability for its dreadful state in whatever way he could. “It was a brilliant performance,” said one former Tory minister shortly afterwards, fully aware of the tricks Hunt had played. “But utterly fucking depressing if you think about it and where it leaves us. The voters know what is going on.” Another remarked: “What more could he do? Politically, his job was impossible.” When Hunt sat down, and was pawed on one arm by Rishi Sunak and the other by John Glen, the chief secretary to the Treasury, all three men looked as if they couldn’t believe the chancellor had managed to come out alive. “Twelve years! Twelve years!” bayed almost the entire Labour frontbench. Beforehand, Hunt had promised to be “honest about the challenges” the country faced, and in some ways he had been, as he had had no option. The UK was now officially in recession, as the Office for Budget Responsibility (OBR) had just declared in its official report. GDP would shrink by 1.4% next year. Things would get a lot tougher before they got any better. But in other respects Hunt was deliberately economical with the truth, out of sheer political desperation. Unlike Osborne in 2010 (who controversially laid the blame for the state of the public finances at Gordon Brown’s door, in the aftermath of the 2008 global financial crisis), there was no way today’s chancellor could get away with blaming Labour for the “failed past”, the last 12 years of which had been Conservative. Instead – without mentioning the £30bn of economic damage inflicted by the mini-budget just weeks ago, or the damage to the UK economy caused by the Brexit that most Tory MPs backed – Hunt blamed global forces. The UK’s recession had been “made in Russia”. And the global pandemic was a big factor too. Given those global causes, what better way to fight back than by invoking a patriotic spirit? “We have risen to bigger challenges before,” Hunt said with echoes of Winston Churchill. “We will face into the storm.” The immediate responses of Conservative MPs to such an un-Tory budget, packed with stealth taxes on middle and higher earners as well as businesses, and benefits increasing by 10%, was oddly muted. Even those who just weeks ago had been pushing Truss and Kwarteng to adopt the opposite strategy – of cutting taxes to boost growth and resisting raising welfare payments by the rate of inflation – were restrained in their criticisms, keeping complaints very largely in the private sphere. Some moaned that it was a “social democrat” budget that could have been delivered by Labour. But most were simply too exhausted – too resigned to what they now regard as the inevitable prospect of Tory defeat at the next election – to have more public arguments among themselves. One former cabinet minister, when asked what he thought of the budget on Saturday, said: “Sorry, I am having the weekend off from criticising the government.” Another ex-minister who served under David Cameron put it this way: “Most of our side have simply given up fighting. Those who have strong views think there is no point in rebelling any more. It is too late. Our side are resigned to losing. Even the loonies prefer to have their ideological arguments in private.” Not even the subject of Brexit raises Tory cheers these days. Indeed, Hunt hardly mentioned it, perhaps because of what the OBR had to say about the consequences of the UK leaving the EU in its report accompanying the budget. “Our trade forecast reflects our assumption that Brexit will result in the UK’s trade intensity being 15% lower in the long run than if the UK had remained in the EU,” it said. “The latest evidence suggests that Brexit has had a significant adverse impact on UK trade, via reducing both overall trade volumes and the number of trading relationships between UK and EU firms.” The Green MP Caroline Lucas described Brexit as the “elephant in the room”, tweeting that “Hunt didn’t once mention how it’s contributed to 4% productivity drop, 15% trade drop, 6% food price increase, lower wages, workforce shortages & highest inflation in G7. Why won’t Govt call it out?” From the Tory side it was left to the rightwing papers to criticise the budget. The Daily Mail’s front page headline declared: “Tories soak the strivers” while its leader column said it was “profoundly depressing” that Hunt had gone against Tory principles of rewarding hard work by cutting taxes. The Daily Telegraph opted for a headline saying: “The Rhetoric of Osborne … with the policies of Brown.” For Labour, Hunt’s first budget was a further opportunity to discredit the Tories’ record and establish itself in voters’ minds as the party of economic credibility. If Labour can be ahead on that metric when the election happens, it knows it will be pretty much home, dry and into government. In her responses to the budget, the shadow chancellor, Rachel Reeves, cast her mind back over the past 12 years and asked the simple question whether the British people had found themselves better off after such a long period of Conservative rule. The answer to that question, she said, was emphatically no. In arguably her best speech since taking the job, Reeves was forensic and effective in calling out the Tories’ tactics in the aftermath of the Truss leadership. “It has been clear for weeks what the government want to do,” she said. “Step one: blame global factors. Step two: pretend the mini-budget has nothing to do with any of them. Step three: portray the chancellor and the prime minister as the people who can clear up the mess of their party’s own making. And step four: play politics by attempting to lay so-called traps for the Labour party.” On Hunt’s claims that global forces were to blame, she was brutal. “Nobody doubts that the Covid pandemic and the war in Ukraine have had profound implications, and the whole House is united in its condemnation of Russia’s aggression, but Britain’s problems started before the Covid pandemic and before Russia’s illegal invasion of Ukraine. The UK has grown by an average of 1.4% a year under the Conservatives, compared with 2.1% a year in the previous Labour years. We are the only G7 economy that is still poorer than before the pandemic. “As the governor of the Bank of England told the Treasury Committee yesterday, the US has grown by 4.2% since the pandemic and the GDP of eurozone countries is 2.1% higher, yet the UK is 0.7% smaller than at the start of the pandemic. We are not recovering; we are heading into recession.” This weekend, despite the economic gloom, both Sunak and Keir Starmer have reasons to be more positive than they were a week ago. The Tories have got through their “nightmare” budget and moved on from the disastrous Truss era, having dramatically changed economic direction. Labour, meanwhile, has laid out its case against the Tories with clarity and conviction. The Observer’s latest Opinium poll shows Labour with a hefty 17-point lead (on 45%, down one point on a fortnight ago) over the Tories (who are unchanged on 28%). But when people are asked which party they would trust more to the run the economy, the figures for the Conservatives are now immeasurably better for Sunak’s party than they were under his predecessor. Back in early October, in the aftermath of the mini-budget, the Tories surrendered a one-point lead on the question of economic management to trail by 19 points in just a week. Now it’s neck and neck, with 31% of voters saying a Labour government led by Starmer would be best at running the economy against 30% who would prefer the Conservatives to be in charge of the finances. Sunak and Starmer are also neck and neck on the question of who would make the best prime minister, with 30% saying Starmer and 29% Sunak. After a week in which the UK was confirmed to have entered recession, there are signs the Conservatives’ descent has halted and that Hunt’s budget has helped that process. The real test will come, however, when tax rises and spending cuts begin to bite in the run-up to the next general election. According to Opinium, 74% of people expect the state of the economy to get worse in the next 12 months. “We may have steadied the ship,” said one Tory adviser on Saturday. “But people out there have yet to feel the real pain. That, in a nutshell, is our problem now.” Five Tory U-turns Personal tax Truss was elected by Tory members as a tax cutter, yet weeks after her departure, a Tory government is putting up taxes. A range of income tax thresholds have been frozen for a further two years, on top of an existing four-year freeze, to April 2028. This has been branded a stealth tax by Tory critics, as tens of thousands of people are dragged into paying tax for the first time. Immigration Since David Cameron’s vow to cut immigration to the “tens of thousands”, the issue has been an obsession with some Tory factions. However, the Office for Budget Responsibility has made clear that net immigration running at above 200,000 props up the economy. Hunt accepts this level, but the Tories’ problem is that home secretary Suella Braverman wants to reduce immigration. Windfall tax A swift U-turn from the brief Truss era came over the imposition of a windfall tax on energy companies. Hunt said he had “no objection” to a temporary tax on profits caused by unexpected events. He hopes to raise £14bn after raising the oil and gas levy from 25% to 35% and extending it until 2028. A 45% levy is also being applied to “low-carbon generators” such as wind and nuclear. Infrastructure Johnson won his big majority at the last election partly on the basis of pledging to “red wall” voters that he would invest in areas of the country that had been marginalised. While Hunt said he was attempting to preserve the investment in cash terms, that means a real-terms cut. It is a move that could lead to projects being cancelled, including a rail upgrade north of Birmingham. Social care Despite repeated promises to deal with the social care crisis, including a vow by Boris Johnson as he entered No 10, Jeremy Hunt again delayed introducing a cap on care costs. Now that it is not due to come in until October 2025, some wonder if it will happen at all. The delay was said to be required to fund an immediate £4.7bn worth of adult social care packages for councils in England.