Yogi Berra, the revered baseball player and coach, would have called it deja vu all over again. A Tory chancellor telling the country it has “turned a corner”, while scattering around a few tax cuts when a general election is looming was not the only reason Jeremy Hunt’s bag of tricks felt so familiar. The sense of having been here before was heightened because of another aspect of his financial statement, a budget in all but name. The chancellor also flourished a “plan for growth”.

He spoke as if getting more out of the economy was a novel idea that had never occurred to anyone before, but his is the 12th growth plan the Tories have fanfared since 2010, which makes it one for almost every year they have been in power. If the Tories had been as prolific at generating growth as they have at producing plans, we’d have no need for another one because the world would be beating a path to our door to discover how the genius UK had become a land overflowing with milk and honey.

Osbornite austerity, sporadic interventionism during the May days, Johnsonian Brexit boosterism, the self-destructing experiment of Liz Truss, each of these was presented as the road to nirvana. Yet Britain still finds itself trudging through the dark valley of grim growth and high taxes while living standards have taken a horrible beating. The Resolution Foundation calculates that the average household will be £1,900 poorer at the end of this parliament than they were at the time of the last election. Do you feel better off for Tory government? That is the question that Labour wants to be front and centre of the election campaign. For most people, the answer will be a resounding no. The Office for Budget Responsibility slashed its expectations for growth over the next two years to anaemic levels and that is more optimistic than the Bank of England, which thinks the economy will be flatlining throughout 2024. Stability is the claimed lodestar of the chancellor and the prime minister. It sounds better than admitting that they are heading towards an election year presiding over stagnation.

It is true that many of the advanced economies have been struggling to significantly improve their productivity since the financial crisis of more than a decade ago. In additional mitigation, the government can argue that the challenge has been made tougher by Russia’s invasion of Ukraine and the pandemic. Yet Britain has performed worse than most of its peers in critical respects. Boosting prosperity on a sustainable basis requires long-term investment in skills, infrastructure, equipment, technology, innovation and the other drivers of growth. Business investment has been the lowest or second lowest in the G7 throughout the Tory years. Public investment, the money spent by national, regional and devolved governments, is well below the average for both the G7 and the OECD.

Bad decision-making explains some of this. So does the repellent way our politics has been conducted. Investors, both domestic and international, prefer a predictable environment to a chaotic one. This has been an era of Tory instability. Five prime ministers since 2010, seven chancellors and nine business secretaries. They have been much too busy treating politics as a grotesque form of soap opera to manage and develop the economy properly. As for other departments relevant to education, skills, investment, infrastructure and technology, there have been seven transport secretaries, nine work and pensions secretaries, no fewer than 10 education secretaries and an astonishing 13 secretaries of state with responsibility for digital and media. The revolving doors of Whitehall have been spun off their hinges. Policymaking has whipsawed in one direction and then its opposite. Industrial and economic strategies are here today, gone tomorrow.

Decent levels of growth allow government to offer satisfactory public services without having to impose heavy levels of taxation. Poor growth means that government ends up taking more in tax while delivering less in services. That is the highly unattractive combination we are living with today and one of the most important reasons why the Conservatives are so very unpopular. Even with the two points off national insurance announced by Mr Hunt, the amount of tax taken as a proportion of national income is still heading remorselessly higher. The Institute for Fiscal Studies reckons that it will be higher even than during the years immediately after the Second World War. And what are taxpayers getting in return for the record sums they are sending to the exchequer? An NHS in permacrisis, unsafe schools, prisons full to capacity and other public services in a state of decay. The UK will remain stuck in this grim trap unless we can get stronger growth.

There is wide agreement that Mr Hunt did announce some useful reforms to encourage investment and speed up economically beneficial projects. A bit late at the fag end of 13 years of Tory rule, but we should give him some credit for making the effort to think long term when many of his colleagues were much more obsessed with short-termist questions such as election timing. I’d expect a Labour government to continue and try to build on many of his measures. Against that, the chancellor added a drag to growth by declaring a cash freeze in government investment spending. The OBR reckons his announcements, assuming they are implemented, will raise output by 0.3% in five years. That hardly justifies the chancellor’s claim to be “turbo-charging” growth. It is a tiptoe forward. Cheerless prospects for growth, combined with the high level of national debt, leads most expert analysis to conclude that the next government will end up in a fiscal crunch that leaves it with no choice but to raise more in tax post-election or impose yet another round of severe austerity on public services. That doesn’t so much bother Tories, who don’t expect to be the next government, but it very much does trouble the people who are anticipating being in power. “Growth, growth, growth,” has become a favoured mantra of Sir Keir Starmer. He and Rachel Reeves, the shadow chancellor, project it as their defining mission and themselves as the people to vote for if you want an expanding economy. They are betting all their political chips on it. This is not just to put a spotlight on Tory failure, but also to offer voters, their party and themselves, perhaps most of all themselves, some succour that the future won’t turn out to be as bleak as is forecast.

Many on the left have traditionally been more animated by questions about how national wealth should be distributed and not so interested in how prosperity can best be generated. Labour’s emphasis on growth is smart and welcome, but a lot of question marks hover over whether Sir Keir and Ms Reeves can pass the tests the Conservatives have flunked. The centrepiece of Labour’s growth strategy is the green prosperity plan. Conceived in conscious imitation of Joe Biden’s Green New Deal, the plan originally promised to deliver £28bn a year of public investment in renewable energy, battery factories, home insulation, carbon capture and other areas of the green transition from year one of a Labour government. The idea being that this will pump-prime billions more from the private sector.

Pushing that plan back towards the second half of the next parliament has left a hole in Labour’s strategy while not stopping the Tories from anyway calling it “reckless” and “inflationary”. Labour is now putting a lot of weight on generating growth from planning reforms designed to accelerate housebuilding and the construction of critical infrastructure. That and refashioning government to become “an agile state” working in partnership with trades unions and business. I get a bit of a sense of deja vu about that too.

A Labour government will be handed a nation with miserable productivity, emasculated public services, big debts, high tax levels and acute inequalities. Labour will probably get a grace period from the voters at the beginning of its term on the understanding that the inheritance from the Tories was awful. Then the pressures will begin to build on Sir Keir and Ms Reeves to find the money needed to renew Britain while not ramping up taxation even higher. The ultimate success or otherwise of a Labour government will be determined above all else by whether it can deliver a more vigorous economy. You could even call it Sir Keir’s holy grail. His government will fail if the quest for growth eludes him as dismally as it has the Tories.

• Andrew Rawnsley is the Chief Political Commentator of the Observer