Rishi Sunak effectively presented two budgets yesterday.
His first was all about continuing to support people and businesses over the next year.
Spending another whopping £60billion, he extended the furlough scheme, support for the self-employed, business rates relief and much else besides.
In erring on the side of generosity he will have left many people reassured and will have given firms the best possible chance of getting back on their feet.
He has also set the scene for a second year of unprecedented public spending and borrowing.
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In doing that, he compared the economic response to the pandemic to how we deal with a war.
We borrow and spend hugely and then treat the accumulated debt as something to be paid off over a generation or more.
But we do have to keep annual borrowing under control and that is what his second budget was about.
While he is going to be super generous this year, there are some very big tax rises to come. The increase in corporation tax will be much bigger than I would have guessed.
A bit risky given how much we need companies to be investing in the UK.
By freezing the personal allowance and other tax thresholds he’ll also be taking £8billion in extra tax from income tax payers.
Remarkably, this Conservative Chancellor will be taking our tax burden to its highest sustained level in history.
Taking him at his word, Mr Sunak has shown himself willing to follow his recent generosity with some hard decisions to repair the public finances.
Whether he follows through on those in the face of inevitable pressure to spend more and tax less remains to be seen.
