The budget details had been so widely leaked that there were few surprises. The chancellor had little room for manoeuvre and resisted the temptation to go for broke. (That probably comes next year, just before the election.) The Lib Dems got their £10,500 tax threshold – which won’t make much difference. The drinkers and bingo players got something; but other betters and smokers did not. There was a little for small business. Those who pay a 40 per cent marginal rate saw the threshold at which they pay it raised a little, but probably not as much as they expected. Older people with savings do well. Changes to pension arrangements, the introduction of more ‘generous’ ISAs and the pensioner bond do something to restore income to those whose savings in the last few years had received negligible returns. It is apparent that the budget is meant to appeal primarily to older voters – who are more likely to vote than any other age group.

There was one odd provision: that members of the emergency services who lose their lives ‘protecting us’ will no longer pay inheritance tax. It is a nice gesture. But how many members of the emergency services actually pay inheritance tax? Osborne’s speech was one of modest self-satisfaction. The worst was over, even if the good times might still be a little way off. This was a budget for ‘makers, doers and savers’.

There has been a remarkable change in Osborne’s reputation since the ‘2012 omnishambles’ budget, even in the non-Tory broadsheets. He is now seen as having a ‘good story to tell’. But the story, however good, is not straightforward; nor is the government’s part in it. The economy is unquestionably growing. Living standards, which have been falling since 2010, may eventually start to rise. ‘Austerity’ is thus said to have its reward. But that cannot be true. There is nothing in present economic or financial circumstances by which ‘austerity’ can promote growth. The main argument for cuts in public spending is that government borrowing, by forcing up interest rates, drives private borrowing out of the market. But interest rates are almost non-existent and companies are sitting on mountains of cash. That justification, therefore, is false. The second argument is that the deficit is so large that interest payments on government debt weigh too heavily on the budget. But the deficit is not historically large and at the moment Britain has no difficulty servicing its debt. That justification is also false. All that a seriously intended austerity can do is suck demand from the economy – which it has done.

Why then is the economy growing? Partly because of the economic cycle: capitalist economies, unless conditions are very terrible or governments very foolish, do recover. At the moment all the western economies are, more or less, growing. There are, in addition, a couple of purely domestic factors. First, consumers have stopped saving and started spending. Second and more important – and here the government has played a part – the private housing market is again looking lively, especially in the south. This budget makes it livelier by extending the Help to Buy scheme to 2020. Yet neither of these is a reliable foundation for sustained recovery. Indeed, the way the private housing market has been allowed to develop is at the centre of our political culture and the heart of our economic problems. And no one seems likely to do anything about it.

Another reason for renewed growth is that the rhetoric of ‘austerity’ has always outpaced the reality. The budgetary deficit is now larger than it was in 2010. In its stated aim – to eliminate the deficit within the lifetime of the present parliament – ‘austerity’ has clearly failed. Despite the talk of fairness, ‘austerity’ has not been conceived as an element in an overall national economic programme, but targeted at those heavily dependent on welfare – people who have always been disliked by the Tory Party, which has used the banking crisis to settle scores. In case we missed the point, the budget proposes to cap welfare spending (allowing for inflation and not including pensions and job-seekers allowance) for the next five years. Osborne’s policies should then be understood as political calculation – and malice – as much as austerity. The poor have been hit hard, but government spending has not seriously fallen.

It is actually very difficult to impose a severe system of austerity on modern European welfare states. They acquire interest groups and social expectations which are very resistant to the kinds of cuts the IMF is always recommending. Even Margaret Thatcher discovered that. Pensions, excluded from the cap, constitute almost half of all benefit spending, but it is thought politically risky to tamper with them further. Ambitious ministers like Michael Gove can also be very expensive. The ‘automatic stabilisers’ in modern European states are precisely that. If levels of government spending in 2008 had been as they were in the 1930s we could really have had disaster. State spending saved us; and it is an instance of the Labour Party’s loss of confidence that it is now so reluctant to admit that.

Do the Tories care very much about this? Probably not. They have primarily been concerned to limit welfare payments to those deemed unworthy of them, and so to make a kind of moral judgment, and to devise a political rhetoric which unites the haves (or those who think they have) against those who have not: a traditional Tory policy which always favours the rich.