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Boris Johnson vows Roosevelt-style 'New Deal' to avert Great Depression

Boris Johnson today vowed a Roosevelt-style ‘New Deal’ to stop coronavirus plunging the UK into a Great Depression.

In a rallying cry to the British people, the PM said he would turn on the spending taps and ‘build, build, build’ to kickstart the economy.

Defying mounting fears about spiralling government debt, he hailed a massive programme of public works, upgrading key infrastructure including schools, hospitals and roads.

He said that is the way the UK can ‘not just bounce back, but bounce forward – stronger and better and more united than ever before’ in the wake of the coronavirus.

To facilitate the construction drive – modelled on massive scheme pushed through by Franklin Roosevelt in the US in the 1930s – the planning system is set to be radically overhauled, including making it easier to turn newly-vacant shops into homes.

Mr Johnson said: ‘We need to be able to move with levels of energy and speed that we have not needed for generations.’

The intervention, in a speech in Dudley, comes after official figures showed that the economy shrank by even more than thought in the three months before lockdown – with worse to come.

Some 9.3million jobs are now being propped up through the government’s furlough scheme, with costs already topping £25billion. 

The continuing threat from the virus has also been underlined as fresh curbs are imposed on Leicester after cases surged in the city. 

Boris Johnson, pictured at a construction site in Dudley today, is pledging to'build, build, build', bringing forward a massive programme of public works

Boris Johnson, pictured at a construction site in Dudley today, is pledging to ‘build, build, build’, bringing forward a massive programme of public works

How does Boris Johnson’s ‘New Deal’ compare to FDR’s?

Boris Johnson today announced he is bringing forward £5 billion in spending on investment projects to support jobs and boost the UK’s economic recovery in what the PM has described as his version of Franklin Delano Roosevelt’s famous ‘New Deal’. 

So how does the PM’s version compare with FDR’s original which was launched by the US President following the Great Depression in the 1930s and was estimated to have cost at the time more than $40billion? 

Hospitals and schools

UK: £1.5billion will be allocated this year for hospital maintenance to improve A&E capacity and enable hospital building. Just over £1billion will be spent on the first 50 projects of a ten year school rebuilding programme. Some £560million will be spent on school repairs.

US: FDR set up the Public Works Administration which provided funding to build things like hospitals and schools as well as dams and airports. It spent an estimated $7billion over the course of its existence. The PWA is perhaps most famous for its spending on the Hoover Dam. 

Roads 

UK: £100million will be spent this year on 29 projects in the UK’s road network. That will range from bridge repairs in Sandwell to improving the A15 in the Humber region.

US: FDR set up the Works Progress Administration to put the unemployed back to work. Building new roads was one of the WPA’s main outlets, along with constructing public buildings, airports and parks. Some 650,000 miles of new roads were built under the initiative. The WPA spent an estimated $11billion.  

Other big ticket items

UK: Some £142million will be spent on making digital upgrades to 100 courts while £83million will be spent on prisons maintenance. A total of £900million will be spent on a range of ‘shovel ready’ local growth projects in England and £96million will be used to boost investment in High Streets.

US: Farmers were paid to leave fields fallow to prevent surpluses and protect prices. New laws were passed to pave the way for hydroelectric dams to be built along the huge Tennessee River.   

Today’s speech will be accompanied by billions of pounds of investment in building and refurbishing schools, hospitals and roads, as well as new spending on transport and local growth projects.

A new unit, dubbed Project Speed, will be led by Chancellor Rishi Sunak this summer to identify projects that can be fast-tracked.

Reform of the planning system to remove ‘blockages’ is also under consideration. And a new National Infrastructure Strategy will be published in the autumn.

Mr Sunak will put the ‘infrastructure revolution’ at the heart of a mini-Budget expected on July 8.

In his speech in Dudley in the West Midlands today, the PM pledged to ‘build back better and stronger’, with a programme designed to reach all parts of the country.

‘Too many parts of this country have felt left behind, neglected, unloved, as though someone had taken a strategic decision that their fate did not matter as much as the metropolis,’ he will say.

‘If we deliver this plan together, then we will together build our way back to health.’

The PM offered an ‘opportunity guarantee’ to young people and those who have lost their jobs because of the lockdown, with major investment in apprenticeships and further education.

Chief aide Dominic Cummings is shaking up the Whitehall machine, which saw the departure of Britain’s top civil servant Sir Mark Sedwill on Sunday night.

Mr Johnson directly referenced the famous New Deal programmes led by Franklin D Roosevelt, which are widely credited with rescuing the United States from the Great Depression in the 1930s. 

Yesterday he confirmed there would be not attempt to ‘go back to what people called austerity’, saying that would be a mistake.

He said today: ‘It sounds positively Rooseveltian, it sounds like a New Deal. All I can say is that if so, then that is how it is meant to sound and to be, because that is what the times demand.

‘This is a government that is wholly committed not just to defeating coronavirus but to using this crisis finally to tackle this country’s great unresolved challenges of the last three decades.

‘To build the homes, to fix the NHS, to tackle the skills crisis, to mend the indefensible gap in opportunity and productivity and connectivity between the regions of the UK. 

‘To unite and level up. To that end we will build, build, build. Build back better, build back greener, build back faster and to do that at the pace that this moment requires.’

Among the projects unveiled by the PM today are:

  • An extra £1.5billion for hospital maintenance this year, enabling the scrapping of mental health dormitories, improving A&E capacity, enhancing infection control and laying the groundwork for a wave of hospital building;
  • A £1billion down payment on a ten-year strategy to fix Britain’s crumbling schools, which will pay for 50 school rebuilds, and an extra £760million will be released for school and college maintenance this year;
  • Some £900million for ‘shovel-ready’ local growth projects, including investment in town centres;
  • Funding for 29 road projects, including an upgrade for the A15 in the Humber region;
  • More than £200million for maintenance and upgrades to courts, prison and young offenders’ facilities.

Ministers will spend the summer trying to identify a much larger programme that can be fast-tracked.

This will include the first of 40 planned new hospitals, along with energy projects, road and rail schemes and flood defences. A commitment to plant 75,000 acres of trees each year by 2025 will be confirmed. 

In a further bid to ‘build back greener’, some of the first new jobs to be created will be 3,000 in local conservation projects protecting wildlife habitats such as rivers and meadows, according to the Telegraph. 

Privately, ministers acknowledge that the Government has made mistakes in its handling of the pandemic, particularly over testing and care homes. 

But Downing Street believes it has the chance to rebuild public confidence by demonstrating it has a strategy for rebuilding the country afterwards.

The total capital investment figure is believed to be around £5bn, which suggests the package includes existing commitments that have been re-nosed as well as new cash, according to the Times.  

How New Deal dragged the US out of Great Depression

The New Deal was a major public relief programme instigated by US president Franklin D Roosevelt in the wake of the Great Depression.

Some 12million Americans were thrown out of work in the years following the Wall Street Crash of 1929.

The newly-elected Democratic president embarked on his ground-breaking plans in 1933, including reform of banks, support for the elderly and the jobless, and the repeal of Prohibition.

The New Deal was instigated by US president Franklin D Roosevelt in the wake of the Great Depression

The New Deal was instigated by US president Franklin D Roosevelt in the wake of the Great Depression

He spoke of the need for the state to help the ‘forgotten man’ at the bottom of the economic pyramid. A centrepiece of the proposals was a massive programme of public works to build up the American economy again.

It is this part of the New Deal to which Mr Johnson was referring when he said that his infrastructure plans were ‘positively Rooseveltian’.

In Mark Twain’s 1889 novel A Connecticut Yankee in King Arthur’s Court, the author called for a ‘new deal’ for exploited workers. Roosevelt had read the book and on accepting the presidential nomination in 1932, he said: ‘I pledge myself to a new deal for the American people. This is more than a political campaign. It is a call to arms.’

Roosevelt established the Works Progress Administration which employed millions of jobless to construct airports, hospitals, schools, post offices, dams, bridges and thousands of miles of roads. By the end of the 1930s America was on the road to recovery.

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