Boris Johnson to announce multibillion-pound Covid-19 stimulus package

Boris Johnson will on Tuesday announce a multibillion-pound programme of investment in infrastructure to stimulate the British economy as it emerges from coronavirus lockdown. It includes £1.5 billion for hospital maintenance, £1 billion for school rebuilding and hundreds of billions for roads and local “shovel-ready” growth programmes.

The prime minister will frame the plan as the equivalent of Franklin D Roosevelt’s series of programmes in the 1930s that eased poverty and reconstructed the American economy after the Great Depression.

“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. A government that is powerful and determined and that puts its arms around people at a time of crisis,” he is expected to say in a speech in the West Midlands town of Dudley.

‘Unresolved challenges’

“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.”

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Downing Street said on Monday night that the programme would cost £5 billion but it was not immediately clear to what extent it would involve new spending. Britain’s public debt has ballooned since the start of the coronavirus crisis and last month was more than 100 per cent of annual gross domestic product for the first time since 1963.

‘Jobs jobs jobs’

Chancellor Rishi Sunak will make a statement about the economy next week but Downing Street said on Monday night that “while in the long term the government must set a path to balance the books, the prime minister is clear that we will not do so at the expense of investing now in the productive potential of the economy, or at the expense of the resilience of the UK’s public services”.

Labour leader Keir Starmer said that instead of “build, build, build” the prime minister should focus on “jobs, jobs, jobs”. He said the economic crisis was so severe that the chancellor should be delivering a new budget next month and not just an economic statement.

“I am concerned that there should be a July budget because we’re living through a health crisis, we’ve got an economic crisis coming right up alongside it, and we’re likely to see unemployment the like of which we’ve haven’t seen for a generation. And I think the government should be putting forward a budget in July setting out precisely how it’s going to ensure that as many jobs are preserved as possible,” he told Sky News.

“Any budget in July has to focus on jobs, jobs, jobs – if we go to two or three million people unemployed, that’s going to be so damaging for so many families and for our economy,” he said.