As we recently moved to the country, where the atmosphere is a little more chilled than the metropolis; and I have been busy working from home; and I am overall a supporter of Chancellor Rishi Sunak’s policy response, I have been pretty sanguine about the long term economic effects of the corona crash and the lockdown until the last few days.

However, I have changed my view. I think the Treasury and the Bank of England are going to have to do more and quickly. This is not a criticism of their measures, merely a recognition of Clausewitz’s dictum that no battle plan survives contact with the enemy.

The immediate cause of my change of heart is that I have been deliberately ringing people I have not spoken to for ages to see how they are and to catch up generally. A handful of them run small businesses, outside financial services, in sectors like events, dentistry, retail, property, restaurants, farming and pubs.

The sentiment I picked up is that literally hundreds of thousands of small businesses and millions of households are either running out of cash, or believe they might, in the next couple of months. They have no money, or less money coming in, yet have costs like salaries, rent, stock, utilities and interest payments to meet. Further, there is a feeling that the Tory Treasury are a bunch of male ex-City types, not a grocer’s daughter among them, too focused on large companies rather than small ones.

A more scientific testament to the gathering cash crunch comes from the unemployment statistics. An additional 477,000 people signed up for Universal Credit in the latest nine days for which data is available. At one stage last week there was a queue of 145,00 to log onto the website.

As there are some 5.9m small businesses in the UK, of which about a fifth are employers, we should assume that it is they who are laying off workers in large numbers. The forecasts of a circa 15% drop in GDP masks widespread tales of human suffering.

Hang on, you might say, I thought small businesses can apply for interest-free business interruption loans; that they are getting business rate holidays and grants; and that they can put their employees on furlough and the Government will pay 80% of the salary up to £2,500 a month?

There is a tendency in politics to assume that if an announcement is well-received, as the Chancellor’s economic response has been, everything must be fine. The reality of all these schemes is there is considerable delay and complication in execution. There is no money flowing out of the Treasury into bank accounts.

First, try getting a business interruption loan and you will find bank phone lines are jammed. Then you have to fill in a form, make a case and get approval. Assuming you can get through the system, a loan is a huge risk to take when you have little or no cash flow and no idea what reasonable forecasts look like.

My contacts in banks tell me they are actually replete with cash and capital, now swollen by their dividends cancelled on political grounds, but a combination of being overwhelmed by distressed clients, a total stop in economic activity, regulatory requirements and the demands of the business interruption loan scheme, means that they cannot actually lend properly into the economy.

One might even go so far as to say that, such is the inclination to fight the last war, i.e. the financial crisis, we might be creating the first economic crisis in history in which the one sector which survives is the banks, even as the rest of the economy is destroyed.

The grants announced by Sunak are dependent on qualifying for business rate relief. But local authorities are also overwhelmed and there are delays in many areas in receiving approval. Landlords and tenants either cannot get through to anybody or are still waiting for a reply. And only when you obtain approval can you apply for the other grants.

The employee furlough scheme is even more uncertain. All the HMRC website says is “The online service you’ll use to claim is not available yet. We expect it to be available by the end of April 2020.” And the similar scheme for freelancers says it will not be ready “until June”. In the case of the freelancers and self-employed scheme, the website tells you not to contact HMRC – its staff are themselves reviewing tax returns and will contact anybody who is eligible.

What is to be done? Three thoughts occur. The first is that rather than fiddle about, it would be better just to send every person with particular tax codes money, say £500 per month, until the furlough schemes are up and running.

The second relates to landlords. Aside from staff, the biggest bill most small businesses face is rent. As it stands, they are paying for buildings they cannot occupy. Some landlords are behaving practically and responsibly, others abominably. A combination of regulatory pressure and bank loans should be used to achieve three month rent discounts, with no quibbles.

Finally, there is the question of confidence. It would clearly be unwise to indicate when the lockdown might finish, but reassurance on how it could be, would encourage businesses to take a little more risk and to keep trading in some form. A commitment to lift the restrictions progressively, on a targeted basis, by deploying the techniques pioneered in Asia, such as mass-testing, temperature screening, health coding, tracing and quarantine orders would give businesses a sense that there is a plan to get the economy moving.

I hesitate to introduce politics into the situation, but it is obviously the case that the Conservatives are quietly delighted with the powerful approval ratings for Boris Johnson’s leadership. It does not take a genius to work out that 2.5 million unemployed and widespread bankruptcies among what used to be the core Tory constituency of small businesses, would provide a very different backdrop for the new Labour leader, due to be announced on 4 April.