First, the scary statistics: the depressing compendium of forecasts that risk transporting UK PLC back to the days when mass unemployment led to feverish agitation and occasional civil disorder.
The Chancellor told MPs in his economic update that the economy had contracted by 25% in two months, the same figure as it grew in the previous 18 years.
It is this unpalatable truth that led the OECD to predict the unemployment rate could hit 15% if there is a second spike of Covid-19 and a return to lockdown.
Even without another spike, it is likely in their view to hit 11.7% by the end of the year, the highest level since 1984 when Margaret Thatcher felt the heat of communities in the merciless grip of de-industrialisation.
It is the prospect of three or even four million unemployed and a disproportionate number of 16-24 year olds on the dole long-term that spurred Rishi Sunak into action.
The question is whether the package of measures – the jobs retention bonus, the kick-start scheme, money for apprenticeships, the green jobs boost etc, will do the trick and reverse what feels inevitable.
It was implicit in what the Chancellor said that he believes he can mitigate but not prevent the full deluge of human misery that mass unemployment brings. The furlough scheme, he said, could not be the subject of endless extensions. It gave false hope since it was essentially a subsidy.
“It is hard to avoid concluding that the jobs retention bonus is a cheaper form of furlough but by another name.”Bernard Ponsonby
Sunak clearly believes that if the scheme runs indefinitely, the net effect is that the Exchequer will keep people in a false sense of security since employers will eventually address the new economic normal by aligning their wage bill to fresh circumstances.
That, in all probability, will lead to furloughed workers being made redundant when it is deemed they are no longer needed.
It is hard to avoid concluding that the jobs retention bonus is a cheaper form of furlough but by another name.
Under this new scheme employers can claim £1000 per furloughed worker as long as they are employed to January of next year. It should be remembered that furloughing ends in October. If every employer claims for every furloughed worker then the cost to the Treasury will be £9bn.
Employers are also being incentivised to take on 16-24 year olds with the government paying wages for six months. More money too for businesses that create apprenticeships.
The success of these incentives lies entirely with companies playing ball and levering in more public money to protect some jobs and create others. There are two problems I foresee here with initiatives which are undoubtedly well intentioned.
The first is that employers may lever in more money as a continuation of helping their balance sheets. The cliff edge for redundancies is moved from October to next January. What this new scheme cannot do is to alter the new realities in certain markets which will be the prime factor in reducing headcount.
The second potential problem is that it could lead to some of the new trainees and apprentices equipping themselves with skills only to find that the overarching issue of economic contraction will soon makes then unemployed workers.
Even the help for the hospitality and tourism sector is short-term. The VAT cut will last for six months when many in the sector believe the downside of lockdown will take much longer than six months to recover from.
The aligning of expenditure in labour intensive sectors that look beyond the short term therefore would appear to represent a better opportunity for revival.
The Chancellor argues his help for the construction sector and the profiling of large infrastructure projects meet that ambition even if opposition MPs believe it is too little and in the case of infrastructure spending the rehashing of previous announcements.
The fact that Rishi Sunak announced a doubling in the number of job centre staff tasked with helping to match the unemployed with jobs tells us that the government is braced for a huge hike in joblessness. The only question is how large the number will be.
The financial numbers attached to every bit of help to date and the cost of today’s announcements are huge. The response until now has cost £160bn, according to the Chancellor.
He told the Commons today that over the “medium term” the public finances must be put on a sustainable footing. That means balancing the books.
How the government balances those books whilst at the same time declaring that austerity is dead leads to an inescapable conclusion. Tax rises and in all probability significant tax rises are on the way. It would require levels of economic growth that are not credible in the medium term to prevent the government from increasing taxes.
But even here there are two problems. Tax too much too early and you depress demand and keep unemployment high. That’s the economic conundrum. The political one is that only last December, the Tories said no tax rises.
Perhaps Mr Sunak could tax humble pie, as in all likelihood, large amounts of it will be eaten in SW1.