Many are now asking whether the Treasury’s latest package of measures to tackle the cost-of-living crisis is “un-Conservative”. Some are also wondering if we should worry about the impact on inflation. My short answer to both questions is “no”. But there is still a lot here to make me uncomfortable too.

To begin with, though, there is nothing un-Conservative about helping the most vulnerable in a crisis. In the current circumstances, simple cash payments may be the best way to do this. Here, most people seem to accept the case for providing more support to low-income households on means-tested benefits, to pensioners, and to the disabled.

The more controversial aspect of Sunak’s package is that every household, regardless of their income, will also receive a discount of up to £400 on their energy bills in the autumn. A lot of this money will clearly go to people who do not really need it.

Nonetheless, this part of the plan can be defended in two ways. First, the £400 discount is at least better targeted than, say, a cut in VAT on domestic fuel. This is because a lump sum payment means that lower users of energy – who are more likely to be poor – will see the biggest percentage reduction in their bills.

Second, a universal payment should ensure that everyone gets something, and that no-one in need who does not qualify under other schemes will fall through the cracks.

It is worth stressing too that the public finances are in a better shape than expected, largely due to buoyant tax receipts (£6.4 billion higher in April alone than forecast by the Office for Budget Responsibility). This “windfall” from higher cash incomes and prices has given the Chancellor some extra wiggle room.

Even without this boost, it would make sense to be flexible, and borrow more if necessary. If the Chancellor had failed to act, consumer and business confidence would be hit even harder. A recession would have been an even worse outcome for the public finances.

That said, there are plenty of valid concerns. The package has reinforced the idea that the state will always bail people out. “One-off” measures also have a habit of becoming permanent. And in my opinion, the fudged windfall tax – sorry, “Excess Profits Levy” – is definitely un-Conservative.

Conservatives should be keener on market-based solutions that help people to help themselves, such as increasing the incentives to work and invest. Sunak has done some good things here, notably the reduction in the Universal Credit taper and the increase in the National Insurance thresholds (both effectively tax cuts for low earners). But in general, this Chancellor has chosen to raise tax rates, and complicate the tax system further. The Excess Profits Levy is just the latest example.

The cost-of-living package also needs to be backed up by meaningful supply-side reforms that will help to ease cost and price pressures. Again, the Chancellor says the right things here, but the reality often falls far short of the rhetoric.

Examples here include the sluggish pace of the reform of planning rules, which has contributed to the housing crisis, and the reluctance to use Brexit freedoms to remove tariffs on imports from the rest of the world.

I am at least more relaxed than many about the impact of the package on inflation. Most of the additional cash will be swallowed up by higher prices for essentials, or saved, rather than spent on other goods and services.

This is certainly the case for low-income households. But I think it applies to richer households receiving the £400 energy bill discount too. They are not cash-constrained to begin with, thanks to pandemic savings, and have benefited the most from higher asset prices.

More speculatively, there are a few ways in which the package might actually reduce inflation. This depends in part on whether the official statisticians decide to treat the £400 energy bill discount as a price cut, which will lower the headline measures of inflation in October, or just a transfer payment, which would be outside the scope or the CPI or RPI. But the additional income from the government could also reduce wage pressures.

Finally, even if the package does add to inflation, it is important to think about the distributional impact: 10% inflation with greater protection for the poor might be better for society as a whole than 8% without.

And if the extra fiscal support does encourage the Bank of England to raise interest rates more aggressively, that would not necessarily be a bad thing either. Most economists agree that fiscal policy has been tightened prematurely, but also that monetary policy is still too loose. Sunak’s announcements may help to correct that imbalance as well.

In summary, a Tory Chancellor has just done what a Labour one might have done – and more of it. I get why many Conservatives are unhappy with this. But on the spending side at least, I think Sunak got the balance about right.

Julian Jessop is an independent economist and Fellow at the Institute of Economic Affairs. He tweets at @julianhjessop.