David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the 2019 general election.

Imagine, for a moment, being Rishi Sunak. One day you went to work as Chief Secretary to the Treasury expecting a routine working day. By lunchtime, you had become Chancellor of the Exchequer and had to deliver a Budget in six weeks’ time. At this point, you were aware of concerns about a new virus, but had little idea what an extraordinary impact this was going to have on society and the economy, and how it was going to dominate your first two years in office.

The challenges you faced were immense but, by and large, the consensus is that you handled this period of crisis management with some aplomb. Even when you got things wrong (opposing restrictions in autumn 2020) this has not done you much damage, and the polling suggests that you are the most popular politician in the country. There is even a very good chance that you could become Prime Minister within a few months.

The worst effects of Covid-19 appear to be behind us, and you can now focus on the simple matters of being Chancellor and becoming Prime Minister. There is even a big speech to deliver which will give you an opportunity to set out your thinking on the economy.

And then Putin orders Russian troops to invade Ukraine.

One relatively small consequence of this action was that the Chancellor’s Mais Lecture on Thursday attracted little attention. It also meant that the lecture had little to say about the economic issue of the day – what are the consequences for the economy of Russia’s invasion of Ukraine and our response to it.

The invasion of Ukraine is an era-defining moment not just geopolitically but also economically.

At a time of already high energy costs, we are seeing an oil price shock that is drawing comparisons with 1973. This means that inflation will peak at an even higher level and the squeeze on living standards will be all the greater.

There is rightly a consensus that economic sanctions must be powerful enough to hobble Russia’s ability to wage war on its neighbours. We should not kid ourselves, however, that sanctions will be immediately effective or painless for us. Our objective with Russia must be the removal from office of Vladimir Putin, but sanctions – if they are to have any effect at all – are only likely to do so over time. (The most important factor in removing Putin is the effectiveness of the Ukrainians in resisting the Russians and, specifically and bluntly, inflicting casualties on the invading forces.)

Reducing trade and interaction between Russia and the West has negative consequences for both sides. It will be worse for Russia than the West as a whole because the West has a much bigger economy (size matters when it comes to trade disputes as we should all know from another context), but there will be damage to the UK economy from, for example, Russia’s exclusion from SWIFT.

The cost of living squeeze and the cost of sanctions will all add to economic uncertainty which may damage economic confidence. This will likely feed through to economic growth over the next few months.

Lower economic growth will mean lower tax receipts, whilst pressures on public spending on measures to mitigate cost of living pressures or increase defence spending will be immense. We may also have to accelerate investment on energy generation. The chances were that the Office for Budget Responsibility was going to have good news on the state of the public finances when it sets out its next forecasts on 23 March, but that is now less certain, even before we see higher spending plans announced.

It is a gloomy prognosis, and there must be some concern within Government that the public has not yet understood that the appalling events in Ukraine will have real consequences for the British people, and that this is not a short term issue. The likely outcome is still that Russia will conquer Ukraine but that, over a period of years, the Ukrainian people will make it impossible for the Russians to continue to occupy it. That, combined with the long term impacts of sanctions, will force Putin out. It may take years, as Liz Truss rightly warned yesterday.

There is a lot to digest and, unsurprisingly, Sunak’s lecture – delivered hours after the invasion – does not attempt to do so. It was a speech that was designed to move on from crisis management and address the long term challenges of the UK economy. The irony is that he delivered it on the day that it became clear that crisis management was, once again, going to be the order of the day.

This is a pity on many levels. It was a serious and thoughtful speech and had much to commend it. The politics of it are also interesting.

To the extent there has been much pick up, it was on Sunak’s remarks about tax. This was an unashamedly fiscally conservative speech arguing that tax cuts can only be delivered when there is fiscal space for it. He corrects the mythology of the Thatcher years in pointing out that taxes were only cut in the 1980s when it was affordable and that, in 1981, taxes went up. The lazy thinking that cutting taxes automatically pays for itself was rightly dismissed.

If there is a leadership campaign in the next few months, this argument will be important. It is more than likely that other candidates will make lower taxes part of their platform and there is already talk of an “axe Rishi’s tax” campaign from Liz Truss. The Chancellor is doubling down on his position. He is right but there are risks for him in defending a tax increase whilst running for the Tory leadership.

He also sets out a moderate and pragmatic argument about the role of the state. He praises the market and the sets out the limits of what the state can do but also recognises the areas where state intervention is necessary. He makes the case for a contraction in the size of the state but also acknowledges the demographic challenges that stand in the way.

He raises the question of how we increase productivity and makes the case that the key considerations are capital, people and ideas. This is the right question and these are the right factors, even if there are criticisms that can be made of the Government’s approach.

On business investment, Sunak rather brushes away the impact of Brexit (he says that ‘the cloud is lifting’ of Brexit uncertainty but that is not entirely true and some of the damage done to business investment due to Brexit will be permanent) and I still hold the unfashionable view that increasing corporation tax rates is a retrograde move.

On innovation, we should exploit the fact that we have two of the world’s greatest research universities with booming technology sectors located near them and have ambitious plans for the Oxford-Cambridge arc. Sunak refers to his experience of living in Silicon Valley and we could have our own version. Instead, we are dropping these plans to focus on levelling up other regions. Politics is trumping economics.

These criticisms should not obscure the overall assessment of a speech which reveals a little more about what kind of Chancellor of the Exchequer he would be in normal times. Unfortunately for us all, including Rishi Sunak, we are not going to be in normal times for some little while.