We cannot insulate everyone from cost of living crisis if we are to escape tax and spend spiral

When the Chancellor came to the dispatch box on Thursday , he faced two unenviable tasks-to control the spiralling cost of living and inject confidence into an economy at risk of tipping into recession.

On the immediate challenge, the support was forthcoming on a significant scale. Indeed, any more and it might have fuelled the inflationary problem it sought to address.

For those of us concerned about taxpayer value, sending cheques in the post-helicopter money, some would say-feels distinctly uncomfortable. However, direct cash payments are quick, easy to administer and do not create an expectation of recurrence, which should help to quell the understandable concerns of a permanently expanded welfare state.

These measures were mostly carefully targeted at the most vulnerable. Indeed, they are highly redistributive, paid for by rising taxes in higher earners and businesses.

Hopefully, they will be accompanied by a steadier hand from the Bank of England, reducing the quantitative easing they pursued for too long and which has exacerbated inflation.

It speaks to the sheer scale of the inflationary challenge that the previous £22 billion intervention proved insufficient. This crisis will pass, although I don't share the optimism that it will recede quickly.

Will more be required down the line? Government simply cannot insulate everyone if we are to escape from the spiral of tax and spend into which we are sinking. Nor can it continue to be so reactive, like a ball being fired around a pinball machine, if we are to provide the strategic ballast that inspires confidence in consumers and investors.

Which leads to the second, even greater challenge. The real problem we face is growth. Here we have more agency, but also less clarity.

We need an economic strategy based on our core principles. Like a ship without an anchor, we risk having no brace against the storms.

In the fiercest storm, you set your strongest anchor directly into the wind. For Conservatives, the heaviest of all anchors, our storm drogue, is the belief that we are stronger when people are allowed to keep more of the money they earn.

State spending as a share of GDP is reaching levels not seen since the post-war era. The tax burden is at its highest level in my lifetime and rising. Frozen thresholds are dragging more and more people into the higher rate of tax and businesses face a steep rise in corporation tax next year, following the increases in National Insurance contributions. It is hard to grow an economy, to incentivise working people and entrepreneurs and to attract investment, in such circumstances.

As a Conservative, it is difficult to explain what differentiates us from our opponents in such an environment.

A windfall tax on the exceptional and unexpected trading profits of energy companies is explicable, but does not inspire long-term confidence. We have to persuade energy companies, like other investors, that we offer a stable regulatory and fiscal environment. Markets at risk of sudden changes in the political weather are not attractive places to invest. The UK is drifting down the table of the most competitive economies.

The Chancellor is working on changes to the tax system to address perennially low levels of business investment. We urgently need serious supply side reforms to build on our economic strengths, in life sciences, technology and financial services and to address our weaknesses, like domestic energy supply, the planning system that holds back infrastructure and housing delivery, and as Britain's labour force has seen the biggest decline of any country in the G7 bar Italy, that encourage more people off welfare and into work.

And we need the courage to make long-term choices, which will take time to pay off, but which demonstrate foresight and resolve. For example, the Government recently scrapped plans to enable homes and new labs to be built around the economic powerhouse of Cambridge, despite local house prices reaching 16 times average earnings and businesses making clear they would head to Silicon Valley to prosper. Short-termism of the worst kind.

The prevailing economic consensus is increasingly from the Left. Like stagflation, it has echoes of the 1970s. Then it took its manifest failure and Margaret Thatcher to turn it around.

Conservatives have been trusted by voters to run the economy for good reason. A recipe of lower taxes, prudent spending and willingness to embrace supply side reforms has served this country well. To escape from low growth and poor prospects, it is more important than ever that we return to first principles.