Daniel Hannan is Director General at the Institute of Economic Affairs.

Andy Burnham might as well have stood up and announced that there will be an election on 6 May 2027. Whatever he claims – and the PM has ruled out an early poll in unequivocal language – he is plainly gearing up to go to the country.

The populist handouts, the petty grants, the hike in the minimum wage, the new paternity leave rights – all these things create an immediate feel-good response at the expense of a hit to our economy.

They are what economists call “revealed preference”: a way to judge people by their actions, not their words. The preference revealed here is that of a government that intends to put off all the hard decisions until after polling day.

The two biggest numbers in that Budget were not cited by the Chancellor, John Healey. The first is the reduction in what is called “fiscal headroom”, in other words the amount in any year that can be used to cut taxes, used to pay off debt or blown away in even higher spending.

John Healey confirmed that he is reducing the fiscal headroom from about £24 billion to £15 billion in 2029–30. If he intended to govern for another three years, he would surely have used that extra cash to reduce our debt.

That, after all, is what the 2024 Labour manifesto promised, and what he himself has recommitted to. The last thing he wants is a bond crisis on his watch.

But instead of providing against one, he is frittering the headroom away on various goodies, all of them designed to elicit a single headline, some of them targeted at specific sectors, charities or constituencies.

The second big number is half a million. That is the number of people who will now become higher-rate taxpayers, a consequence of leaving the bands unchanged while inflation continues to erode the value of our money.

This Budget will, when all the numbers have been run, almost certainly mean the highest tax take in our peacetime history. So will next year’s, and the year after that. Fiscal drag is the engine paying for the massive increase in our social security budget. Everything else is detail.

Still, details matter. Again and again, we heard announcements that sacrifice long-term prosperity to short-term popularity. Special deals for miners, special deals for carers, an extension of maternity and paternity leave. None of these things is cost-free. All have to be paid for. But an electioneering government might reasonably hope to get the good headline now, and the economic pain later.

Will it work? Probably. Frédéric Bastiat famously distinguished good from bad economists by a single test: did they consider second-order consequences? As a nation, we have repeatedly failed that test. We applaud cash handouts without stopping to ask where the money is coming from. We cheer tax rises that we think will fall on other people – bank taxes, mansion taxes, wealth taxes – without stopping to consider how we will suffer from the slower growth that follows. We approve of rises in the minimum wage while simultaneously moaning about how hard it is for young people to find jobs.

“Again and again, we heard announcements that sacrifice long-term prosperity to short-term popularity.”

Our short-termism became especially acute during the lockdown, and our politicians noticed. Hence the sector-by-sector, town-by-town grants announced yesterday: £10 million for brewers, £15 million for Dolly Parton books, £6 million for Glasgow.

Then the brazenness of giving households £100 each, the kind of policy that I associate with the populists of my native Latin America. And it seems to be working.

It is true, of course, that the PM has ruled out a snap election, clearly, repeatedly and recently. Asked earlier this week whether he was softening the country up for an early poll, he replied: “No, I’ve ruled that out.”

Then again, Theresa May ruled out an early election in 2017. Boris Johnson ruled out an early election in 2019. They ruled them out right up to the moment when they called them.

The awful thing about this kind of Peronism is that, in its own terms, it works. Yes, it leaves people poorer, and drains a nation’s wealth. But it creates client groups dependent on the government and builds a statist electoral majority. As the old adage goes, democracies get the leaders they deserve.

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A Budget of sweeteners and stealth taxes