Just as Russian tanks were starting to roll into Ukraine, Rishi Sunak revealed himself to be a Thatcherite in trainers. His Mais lecture last month was a paean to his heroine’s philosophy. Yet the past decade has shown this creed to have been a failure in the light of its original aims. It has not increased productivity. It has not led to lower inflation. It has not seen the national debt fall. Mr Sunak says the problem is that businesses won’t invest – yet why would they if sales are drying up? Thatcherism’s economic legacy has seen wages stagnate, insecure work increase and the government starved of resources.

Rather than rethink, Mr Sunak dug his heels in. In his speech he called for a “new culture of enterprise” and lower taxes to promote growth. But this has been on the song sheet of every chancellor since 1979. Mr Sunak may be reverting to type because of a largely forgotten component of Thatcherism that may prove useful in the years ahead. Margaret Thatcher came to power after a decade of economic problems. In the 1970s, these were captured by the portmanteau “stagflation” to describe what happened when high unemployment and high inflation rates occurred simultaneously. In most nations, the double-digit inflation of the 1970s was caused by oil shocks. Thatcherism’s insight was to shift blame for price rises away from commodity producers to high public spending.

Mr Sunak faces a not dissimilar situation as the cost of fuel and food surges. Things are getting more expensive. Either the government or households or companies or some mixture of the three will pick up the tab. The chancellor’s lecture outlines an anti-state, pro-corporate political programme that could be sustained while household finances deteriorate. This may be framed as the price the British public must pay to defeat Vladimir Putin. The Resolution Foundation forecasts that higher than expected inflation will see a typical household’s income drop by £1,000 this year – the biggest real-terms fall in incomes since the mid-1970s. But this is unnecessary suffering. Mr Putin won’t be defeated by such needless pieties.

The budget is set for 23 March. Mr Sunak should act before then and set out how he intends to deal with falling living standards. There are plenty of good ideas around. Instead of offering more tax deductions for companies, Mr Sunak ought to take a leaf out of Labour’s book and impose a one-off windfall tax on oil companies to fund lower bills for consumers. He needs to be more generous to help with gas bills in the face of soaring wholesale prices, especially for poorer families. The government should uprate benefits in line with higher inflation costs so that workers and pensioners are protected from a potential £10bn real-terms loss. Ministers could, as suggested by the Institute for Public Policy Research, protect incomes by raising the minimum wage level or paying public sector staff more.

Now is not the time for ideological peacocking. There is no place for balanced budgets today. Hiking interest rates will not bring down inflation caused by disruptions to supply. Price rises will end when their sources – found in the post-pandemic disorder and war in Ukraine – subside. The UK needs energy security, not worker insecurity.

There are enough onshore wind and solar projects granted planning permission to make up for the shortfall caused by banning Russian energy imports. But ministers have yet to back them. Mr Sunak should adjust his policies in the light of developing circumstances. To ignore what is happening and go on as before might be acceptable if the basic premises upon which his policy is founded were right. But they are wrong and are damaging Britain.