Build, build, build, says Boris Johnson. Building has been the vanity of the populist politician down the ages from Nero to Napoleon. Johnson is no exception. The hardest-hearted Tory may treat ordinary public spending as wasteful, but spending on capital projects is glorious.

This week history is to repeat itself. David Cameron and George Osborne answered the 2008-09 crisis by slashing spending on public and local services by a third in a decade of austerity. Yet they sailed ahead with nuclear power stations, aircraft carriers, high-speed trains, airport runways and garden cities. Billions were promised, though little or nothing was seen in short-term benefit.

In a speech tomorrow, trailed in the newspapers over the weekend, Johnson is set to announce “Project Speed”. The proposals are similarly worthy: schools, hospitals, roads, railways, airports, housing. Add a few power stations and his might be a postwar Labour government. Britain certainly needs some of them one day – though surely not trains and airports – but none qualifies as “speedy”. Central government is the worst contractor. Since Tony Blair took over school building from local councils, we have seen a renewal programme launched in 2004, scrapped in 2010 and resumed in 2014. What now?

London’s Royal Docks is the graveyard of these Johnson projects. A ghostly cable car drifts empty across the Thames, while a giant “Nightingale hospital” lies equally empty nearby. Towering in the background is Johnson’s idea of house-building, rows of luxury apartments initiated by him as mayor and aimed at foreign buyers. The proposed new cluster now haunting his colleague Robert Jenrick was first approved by Johnson as mayor.

This is not the moment for Roosevelt’s dams or Stalin’s power stations. What the economy needs is not buildings tomorrow but jobs today. And jobs mean cash, not bulldozers. The chancellor, Rishi Sunak, has rightly taken 9 million people on to the public payroll under furlough, the most sensational act of de facto conscription in peacetime and costing £14bn a month. In four months’ time, this army is to be demobilised. The Office for National Statistics suggests a million workers will be thrown on to benefits, sending the jobless figure to 3.8 million people. A few building sites will do nothing for them.

Ask any teacher, doctor or social worker what they most need and they will say cash: for staff, for equipment, for repairs, for transport. They want to use efficiently the buildings that they already have. So chaotic has been the NHS response to Covid-19 that many hospitals are reportedly operating at just half capacity. Schools are craving auxiliaries. Local councils are desperate for care workers. The labour is there, but not the money to pay them. Johnson’s fast train from London to Birmingham in 2030 is no use.

The catastrophe that has struck the British economy has hit the private sector hardest, and the smallest firms and poorest employees hardest of all. High-street stores are reporting sales down by between 20% and 60%. These are businesses that have had their trade declared illegal for three months by the government and which, in all fairness, deserve compensation. The Institute of Directors reports that more than half of directors it polled have a crippling debt mountain.

For Sunak this should mean not just fiddling with VAT or national insurance. It means extending furloughs, freezing rents and loan write-offs on a massive scale. The grim reality is that a Tory government has devastated a swathe of lower-order capitalism. It took Gordon Brown at the weekend to call on Johnson to stage a “recapitalisation of small business”. That means doling out far more than the £55bn or so of furlough money.

Beyond this, what small businesses need most of all is customers. They need people with cash to pass from pockets to tills. They need to see order books filling, vans moving, warehouses emptying and manufacturers back at work. The strangely harsh treatment of pubs, restaurants and gyms compared with the rest of Europe is going to decimate the casual and “gig” economy. This is where unemployment will really bite, and high-end construction is no remedy at all.

Worse is to come. Coming off furlough will be bad enough, with the OECD promising Britain the deepest economic shock in Europe. But Johnson is determined to exacerbate it with his continued threat of a “no-deal Brexit” in the new year. This, not Covid-19, is the real “second spike” facing the economy, and it is one against which as yet it has no protection.

There must be some government assurance that it will maintain private spending power over the next year, by any means from tax cuts or pay rises to handouts to the needy. The risk of inflation by the short-term “printing of money” must be accepted as necessary in this crisis. Just now, the British economy does not need to build, build, build. It needs to spend, spend, spend.

  • Simon Jenkins is a Guardian columnist