Coronavirus: Boris Johnson pledges 'new deal' to build post-virus

Building workReuters

Boris Johnson is unveiling government plans to soften the economic impact of coronavirus with a promise to "build build build".

Speaking in the West Midlands, the prime minister will say he wants to use the coronavirus crisis "to tackle this country's great unresolved challenges".

As part of a "new deal", Mr Johnson is setting out plans to accelerate £5bn on infrastructure projects.

Labour has called for a "laser-like focus" on preventing job losses.

The prime minister's speech comes as BBC analysis found that the UK was the hardest hit of all the G7 major industrialised nations by the virus in the weeks leading up to early June.

In April, the UK economy shrunk by a record 20.4% as a result of the spread of coronavirus and the subsequent lockdown measures.

Aiming to emulate the New Deal policies of the depression-era American President Franklin D. Roosevelt, Mr Johnson will say he wants a government that "puts its arms around people at a time of crisis".

In the aftermath of the Wall Street Crash of 1929, President Roosevelt launched one of the largest, most expensive US government programmes which included building schools, hospitals and dams.

In a bid to boost the country's financial outlook, Mr Johnson is pledging to put jobs and infrastructure at the centre of the government's economic growth with a commitment to "build, build, build".

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Unemployed men queuing for food in depression-era America - the crisis that prompted President Roosevelt's New Deal

Mr Johnson will say he wants to use the coronavirus crisis as an opportunity to "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".

"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.

"And so I want you to know that this government not only has a vision to change this country for the better, we have a mission to unite and level up."

Projects in the £5bn investment plan include:

  • £1.5bn for hospital maintenance, eradicating mental health dormitories, enabling hospital building and improving A&E capacity

  • £100m for 29 road network projects including bridge repairs in Sandwell and improving the A15 in the Humber region

  • £900m for "shovel ready" local projects in England this year and in 2021

  • £500,000 - £1m for each area in the towns fund to spend on improvements to parks, high street and transport

  • Over £1bn to fund a schools building project, as announced on Monday

  • £83m for maintenance of prisons and youth offender facilities, and £60m for temporary prison places.

The government says it will bring forward funding to "accelerate" infrastructure projects in Scotland, Wales and Northern Ireland.

Scottish First Minister Nicola Sturgeon said the PM's plans fell "woefully short" of an economic recovery package recently announced in Germany.

"I also suspect there will be less to it than meets the eye in terms of genuinely new money," she tweeted.

Chancellor Rishi Sunak will provide an update on the economy next week, and in the autumn the government will publish a National Infrastructure Strategy.

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Shadow chancellor Anneliese Dodds said the focus should be on "jobs, jobs, jobs"

Earlier, shadow chancellor Anneliese Dodds told BBC Breakfast Labour supported investment, but a "strong laser-like focus on unemployment" was needed.

She urged the government to abandon a "one-size fits all approach" to economic support, calling for measures "more focused" on individual sectors.

She added that spending to improve prisons and courts had been promised "quite some time ago," adding: "What the prime minister is talking about appears to be mainly spending that's already been committed to".

Liberal Democrat education spokeswoman and party leadership contender Layla Moran said Mr Johnson's plans looked like "a rehash of manifesto pledges" and accused the government of "running out of ideas".

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The prime minister has promised to "level up" communities across the UK

Federation of Small Businesses (FSB) national chairman Mike Cherry said the announcement was "encouraging" but said it was important that small businesses were not "locked out of the ambition to build... because of cumbersome public sector procurement rules".

And British Chamber of Commerce director-general Adam Marshall said the government's plans had to "take shape on the ground swiftly to give a real confidence boost to businesses and communities".

For weeks ministers, including Mr Johnson, have been promising a bold green recovery package to create jobs whilst cutting carbon emissions. In the pre-released summary of his speech the prime minister did pledge to "build back greener" - but some environmentalists consider his response inadequate.

The think tank Green Alliance, for instance, calculates that ministers need to spend £14bn to meet CO2 targets. It says the government is spending £9bn on projects that actually harm the climate.

Mr Johnson re-iterated a policy of planting 75,000 acres of forest a year and said he'd create new conservation rangers.

But he didn't mention home insulation - the sector consistently judged best for cutting emissions and creating jobs.

And there was no suggestion of scaling back the £27bn roads programme, which will increase emissions and is judged by the Trades Union Congress to be poor value for job creation.

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