B ORIS JOHNSON’S appointment as prime minister does not just mean a new approach to Europe. On July 24th he appointed Sajid Javid, formerly the home secretary, to replace Philip Hammond as chancellor. An emergency budget is said to be in the works. It seems likely that Mr Johnson’s tenure will confirm a crucial shift in Tory economic policy. A party that was obsessed with fiscal discipline is turning lax.

When the Conservatives came to power in 2010 Britain was in a tight economic spot. Following the financial crisis it was running a budget deficit of 10% of GDP , one of the largest in the rich world (see chart 1). George Osborne, then the chancellor, implemented big spending cuts and tax rises. After promising more fiscal austerity in the run-up to the general election in 2015, the Tories won a majority.

The shift away from this ascetic stance started shortly after the election. Evidence emerged that public services had begun to deteriorate. The number of “delayed transfers of care”—people stuck in hospital because they had no care home to go to—rose sharply from 2014-15, as did the number of violent incidents in prisons. More people came to believe that higher taxes and more government spending were necessary (see chart 2). A surprisingly strong economy in 2016-18 meant that the deficit fell.

Mr Hammond, who succeeded Mr Osborne in 2016, loosened fiscal policy a little. Yet with Brexit hanging over the economy, he eschewed costly crowd-pleasers in favour of amassing what became known as his “Brexit war-chest”. This is the difference between the forecast structural deficit in 2020-21 and Mr Hammond’s self-imposed target for that year. At present there is some £27bn ($34bn, or 1.2% of GDP ) of fiscal headroom, which would have allowed Mr Hammond to give the economy a one-off boost in the event of a slowdown. Many Tories, however, believe the war-chest is a pot of money squirrelled away in the Treasury. In her final days as prime minister, Theresa May tried to get all sorts of costly projects past Mr Hammond. On the campaign trail, Mr Johnson referred to the war-chest as the source of funds for tax cuts and extra spending. This is nonsense. Mr Johnson’s promises—including a rise in the points at which people pay national insurance and the higher rate of income tax, and lots more cash for schools and the police—would instead lead to a permanent rise in public borrowing.