Picture the scene. A Labour chancellor has just admitted that Britons will soon get poorer – much poorer. That he has binned his predecessor’s plans for cutting spending and reducing debt – the very ones he had enthusiastically supported until a few weeks ago. What’s more, he has no replacement – merely a resigned acceptance that Britain’s “unsustainable” overdraft will grow bigger. For arguably the first time since the ERM crisis of 1992, the Treasury has no fiscal strategy worth speaking of. Just as the UK is lumbering off a diving board with no certainty of water below, everything rests in the hands of Mark Carney and his exhausted officials at the Bank of England. Still, don’t worry, the chancellor reassures his party conference and nation: a new plan will surely come along … in a couple of months.

Philip Hammond vows to match lost EU funding for business Read more

Now imagine the uproar. Even before the minister had read to the end of his Autocue, senior Tories would be mobbing the TV studios to decry this incompetent. A furious press would round on his government. How could they be so ill-prepared, the pundits would ask. And this time they would be right.

Well, fantasise no longer. Because everything described in the first paragraph has already happened, this morning. Except all those black clouds and blank bits were delivered by a Conservative chancellor – and the most an indulgent commentariat could say was that Philip Hammond’s delivery could do with a bit more pep. Stumbling into another lost decade to add to the one after the credit crunch, we can at least prove TS Eliot quite wrong: this world ends with neither bang nor whimper, but with a few limp gags.

Such are the contradictions of the Conservative conference, as reflected by a largely Brexit-friendly media and a Westminster press pack less bothered about policy than presentation. Over the new few days, you’ll hear chaos described as competence. You’ll see hard-right ministers praised as part of a centrist government. And you’ll read straw-clutching passed off as strategy.

Straw-clutching? Just look at the Twitter feed run by Liam Fox’s Department for International Trade, which regularly posts the business openings available now that we’ve been liberated from exporting to the world’s biggest single market, otherwise known as The Hated Europe. “Could you take your tonic water to #Thailand‪?” asks one. Another informs us that some firm in Norway is after British organic crisps, while the Japanese need our seaweed powder. And France wants “innovative British jams & marmalades”. Each announcement ends brightly with ‪#ExportingisGREAT, as if Derek Trotter had run amok with a hashtag.

The problem with this cabinet is not that they lack ideas for Brexit Britain: not at all. It’s rather that they’ve got too many and most haven’t been baked for long enough. Consider cabinet minister Andrea Leadsom’s demand that Britons take up fruit-picking – while her colleague Jeremy Hunt urges them to train as doctors. Consider the Tories’ various barmy import-substitution plans, such as Liz Truss’s plaintive cry a couple of years ago that Britain imports two-thirds of its cheese and “That. Is. A. Disgrace”. Down one side of the cabinet, free-trade buccaneering; down the other, economic autarky on all dairy products. And on both sides, a preference for factoids over evidence and for blue-sky thinking over anything remotely serious.

All the announcements of the past two days boil down to four words: Hard Brexit, Softer Austerity

Some of this might be funny, if this lot weren’t running a country in parts of which young boys have shorter life expectancy than their counterparts in North Korea, and where, according to renowned economist Philip McCann, 47% of the population lives in regions with the same productivity as East Germany in 1991. Getting around these problems will require more than warm words on Downing Street and neologisms such as the northern powerhouse and the Midlands Engine. A lot more.

Instead of which, we have Hammond. Taken seriously, all the announcements of the past two days boil down to four words: Hard Brexit, Softer Austerity. In her speech on Sunday, Theresa May made it clear that bringing down immigration is more important than maintaining a place in the single market. Come next spring, Britain will be heading out of Europe entirely. Hammond clearly believes that will produce a big hit to our national income – not in one go, but over a number of years.

He has good reason to think so. Look, for instance, at the Bank of England’s agent reports. This is the stuff Carney and the monetary policy committee pore over when setting interest rates: a regular summary of discussions with around 700 businesses from all sectors across the entire country. For months, the agents’ scores of business intentions to invest have been flatlining – while the indices for willingness to take on new staff are now negative. Meanwhile, in the press big employers such as Nissan are now effectively demanding danger money to keep investing in Britain. For the past few months, the press has been playing a lovely parlour game of “where’s the Brexit crash?”, when they ought to have been looking out for the Brexit slowdown.

A smart man, Hammond gets this. Yet he does little to mitigate the coming pain. The big policy of his speech is that he will dump George Osborne’s debt targets – which he would in any case have missed. The big spending commitment is an extra £3bn towards housebuilding (plus £2bn for an “accelerated construction” scheme) of which, by the Tories’ own admission, the majority is old funds re-labelled. That is after three months on the job. By comparison, within three weeks of moving into No 11 in May 2010, Osborne had already found over £6bn of spending cuts.

Come his autumn statement, my bet is that Hammond will do a bit more tweaking – perhaps to capital allowances or business rates. Such policies will be cocktail umbrellas in the face of the gale that the chancellor himself is expecting. As the former Bank of England rate-setter David Blanchflower says: “Mark Carney is now the only adult left in the room.” Except with interest rates at 0.1% and hundreds of billions already pumped into financial markets, Threadneedle Street is nearly tapped out. The only other lever policymakers are allowed to pull is to permit the pound to tank, to provide some succour to exporters.

Under Osborne and Cameron, failed austerity could always be excused by the shadow bankers who had bankrolled their general election campaigns and got the tax cuts they wanted. Then there was big business, scared of Red Ed and his promises to tackle predatory capitalism. But this policy crisis comes on top of a structural crisis of Conservatism. Cameron and May have just held and bungled a referendum that their backers in Big Business and Big Finance never wanted. To stave off Ukip, the Tories must inevitably attack the very interest groups that have for years kept them in power. The only thing keeping them in power is the assurance, spread loyally by the press, that things really would be so much worse if Labour were in charge.