It wasn’t really a spending review at all. Structurally, totally different – in that many departments got a one-year rollover of their budgets rather than new spending limits for three or four – as well as being more politically in thrall to events than in shaping them.

Usually, a CSR is one of the biggest political events of an entire Parliament. Months’ worth of often painful negotiation with departments translates into an opportunity for the Chancellor to set the government’s narrative – for prudence, investment, innovation. Today was necessarily much more a defensive exercise in mitigation, with many of the hard choices still to come.

But that doesn’t mean this spending review wasn’t instructive.

First, these things are customarily more about politics than economics – particularly given they don’t set fiscal policy. That balance flipped this afternoon. It’s the economic forecasts from the OBR that will dominate much of the coverage. With almost brutal concision, they set out the depth of the national problem we face.

On the record today, No 10 described those forecasts as ‘sobering’. Privately, the language is fruiter – ‘heart-stopping’, ‘horrendous’. They expect GDP contraction of 11.3%, the biggest in over three centuries, and no return to pre-crisis levels of output until the end of 2022. The scale of the acceleration in debt is huge – previously, the government was forecast to borrow a little over £50 billion this year. The in-year estimate is now around eight times that – as the Chancellor said, the highest in our peacetime history. The unemployment rate is forecast to grow to 7.5%, or 2.6 million people. The public response as those numbers become reality, more than anything announced this week, will dictate the fortunes of this government.

Second, Downing Street has shown us some of the areas where they expect to face political pressure in future. Aides are increasingly worried that cancellation of elective surgery to free up Covid-19 capacity in hospitals is creating a huge backlog for other treatments. The size of the waiting list is a very tangible measure of how efficiently a healthcare system is working – and official figures already show there are four million people waiting for treatment for the first time in a decade. It’s precisely why the Chancellor is attempting to get in front of the problem now – by designating £3 billion for the NHS to reduce waiting lists.

Third, this was a demonstration of just how toxic the PM thinks the language of ‘austerity’ is – never hinted at, let alone uttered, despite the fact that Ministers concede tax rises are inevitable and the public sector pay freeze next year (outside the NHS and for those on low incomes) is one of the defining policies of 2010 – 2015 austerity politics. There was an ‘economic emergency’ after the 2008 crash too – but the way David Cameron framed tackling it for the electorate is markedly different to the choices of his successor.

Fourth, given how worried Downing Street is about restiveness in the Conservative party, the policy choices on show are illuminating. Rishi Sunak’s assertion that maintaining foreign aid spending at 0.7% of GDP is ‘difficult to justify to the British people’, without a specific commitment to when the spending will be restored, speaks to an administration more worried about its right flank of MPs than its left. This represents a win for the traditionally Eurosceptic group on the right – one that’s becoming increasingly lockdown-phobic.

The peculiar nature of today was dictated by an almost uniquely uncertain political environment. It’s likely that several Covid-19 vaccines are on the way, but still with questions to answer about exact efficacy and timing. With not even 40 days to go, there’s no firm indication on whether or not a trade deal with the EU will be struck. That unpredictability affects every area of life in our country – particularly so for business. Because the challenges are so fundamental – as the OBR data indicates – the hard choices will continue to pile up in this Parliament. At Lexington we can help you achieve your goals within that environment. Let us know if you’d like to talk through the implications of the SR, or politics right now for you more generally – we’d be happy to set up a conversation.

Paul Harrison, Senior Counsel, Lexington