Was this the missing piece of the jigsaw?

Until today we had interest rate cuts, commercial loan guarantees, mortgage repayment relief, grants for small firms – all designed to prop up businesses and households in the face of the economic hurricane created by official efforts to suppress the spread of Covid-19.

But what Rishi Sunak has announced today goes further than any of that.

There are, the chancellor told us, to be direct state grants to cover most of the payroll costs of companies, even as their revenues collapse.

The expectation in return? That these firms will not shed workers en masse in what looks almost certain to be a deep recession.

Something along these lines has been the demand from a host of labour market experts.

The design is similar to a scheme announced last week by Denmark.

So will it work?

Well, the chancellor repeatedly stressed at the press conference on Friday that what he was announcing was “unprecedented”. And that’s the crucial word.

This is not something that has ever been tried before, certainly not on this scale, so we simply cannot say with any confidence that the promise of government cash will persuade companies to retain staff.

Yet the incentives created by the core of the job subsidy plan seem broadly appropriate. The mechanism to deliver the funding seems practical.

The government is, quite rightly, signalling that the scheme will be extended in time if necessary and that there will be no financial cap. If firms are to have the confidence necessary to hold on to workers, their bosses need to be reassured that this support will remain for as long as it takes and however much it costs.

The support of trade unions and employers groups is encouraging.

And for those without employers, those five million self-employed, many of whom are likely to see orders and jobs dry up in the coming months? The increase in unemployment benefit payments is, of course, no compensation for a lack of work, but it will at least help sustain them financially through this crisis.

Broadly, the job support programme seems well designed. Yet we all know that the acid test is not how good it looks on paper but what happens to employment in the coming days and weeks of this crisis.