THE latest Budget is of the type George Osborne would have given one year out from a general election, to save the Tory party’s skin, and then go back to austerity later. This is what he did in 2014.

The 2025 Budget was far less strategic. It was a Budget to save Keir Starmer’s neck, and go back to austerity later.

The headline-grabbing measures are embedding the summer U-turns on welfare and the winter fuel allowance and now on the two-child benefit limit. These are very welcome, the right thing to do.

Austerity should not be imposed on the poorest and most vulnerable, while those who cause the crisis are shielded from the effects of their actions.

But the U-turns were made for expediency, under pressure from MPs. It is not long ago MPs were getting suspended from the Labour Party for voting for what has become government policy. The campaigners and the rebels were proven right.

Yet the awful truth is that it is mainly public services and the living standards of ordinary people that will be hit to pay for Starmer’s U-turns (and those on welfare will also face new indignities in an effort to keep the welfare bill down).

Because the Office for Budget Responsibility is clear, austerity is not going away. They say there are “frontloaded spending increases of £9bn, but £26bn in backloaded tax increases,” which is a factual assessment of the Budget. Half of that tax increase comes from extending the freeze on basic rate income tax, which is austerity, it is paid for by ordinary workers, regressive and should be opposed.

Worse, there is a new chokehold on departmental spending, despite the spin placed on the Budget by government ministers. It is simply untrue that departmental spending is being protected.

NHS spending will rise in real terms over the forecast period, but by far less than its long-term average, 2 per cent, not the historic and necessary rate of 4 per cent. Worse, even this constrained spending increase will largely be wasted over the long-run by renewed reliance on the costly and failed PFI system.

The situation is even worse for other departments. Local government is not being starved or cut outright again as it has in so many recent Budgets. But is put on starvation rations of just 1 per cent real average annual increases, presumably in a token effort to stave off further council bankruptcies. The crisis of local government is baked in.

Perhaps most shocking is that education is facing a small real-terms annual, average cut over the period. This is a massive break with tradition, and any decent education secretary would regard it as a resigning matter. All the mantras about children or education needing investment because they are the future are trite and meaningless when the education budget is falling.

The exception to the rack of hairshirts for the spending departments is the military budget, which is rising without any economic benefit at all.

This is because the government has said it will meet Donald Trump’s target of sharply increased military spending. As a result, while most departments are going to struggle with underfunding and education is being cut outright in real terms, the military budget is rising. It is going to increase by £9 billion in the next few years. This will have a negligible economic impact and is simply Britain’s contribution to beefing up the US war machine. The false claims that military spending is “jobs-rich” have been widely exposed, and the meagre of number of jobs created will mainly be in the US.

Crucially, it is clear that the welfare U-turns could have been funded by freezing military spending, not the basic rate of income tax and hitting ordinary workers.

Over the longer-term, the government seems to have given up on its central point that growth is crucial. There was barely a mention of it in the Budget. Growth is crucial, not just for the economy and government finances, but also for the well-being and militancy of workers and the oppressed. It is no accident that the recent strike wave of 2022-23 took place during the economic rebound coming out of lockdown.

But now the growth forecasts are terrible, low growth as far as the eye can see and no public investment to lift the economy at all. The government has stopped pretending on growth. There is no mention of a plan for growth. Its previous policy was based on a Thatcherite assertion that deregulation would lead to increased private investment.

Once again, this idea has proved to be a complete fiction. Private investment is barely higher than nine years ago and has actually fallen since this government announced its big plans for deregulation.

And there is no planned increase in public investment, which just crawls along at the same snail’s pace as the economy at an average pace of 1.5 per cent a year. Given that the main driver of the crisis of the British economy is the dearth of investment, this failure of public investment closes the one avenue that could lead to sustainable growth. As a result, the current economic and fiscal problems are not going away.

Not that the fate of the economy or the well-being of the population appear to be the main priorities for Starmer and his Cabinet. When Labour was trounced in the May elections his response was that he would press ahead “further and faster” than before. But the Caerphilly by-election blew up all No 10’s comforting myths that, in a two-horse race between him and Nigel Farage, voters would have to choose Starmer.

It has also had a seismic impact on the morale of Labour MPs, which is why his chosen candidate could not possibly win the deputy leadership contest. Polling of Labour members shows that any one of Wes Streeting, Andy Burnham, Angela Rayner or Ed Miliband would beat him in a leadership vote.

So, the priority of this Budget and everything else until after the May local elections will be to preserve Starmer. After that, he is back to the Mr Micawber hope that something will turn up. Meanwhile, ordinary people will be pushed into paying higher taxes and will suffer even worse public services. For the majority of the population there is nothing to cheer about in this in Budget.