BORIS Johnson is due to unveil plans for a £5 billion “infrastructure revolution” this morning in a speech which he has dubbed “Rooseveltian”.
In a major speech on Tuesday, the U.K. prime minister confirmed his commitment to long-term investment in some of the country’s most deprived regions, arguing that balancing the books must wait until recovery is secure.
Reprising spending pledges he made before December’s general election, Johnson’s office announced the acceleration of 5 billion pounds ($6.2 billion) of investment in roads, schools and hospitals and promised to publish a strategy for further capital spending in the fall.
“We cannot continue simply to be prisoners of this crisis,” Johnson said in a speech in Dudley, central England on Tuesday. “We must work fast because we have already seen the vertiginous drop in GDP and we know that people are worried about their jobs and their businesses.”
The prime minister said he will not repeat the austerity policies his party imposed after the 2008 financial crisis. “We are not going to cheese pare our way out of trouble,” he said.
He is comparing his program to President Franklin Delano Roosevelt’s “New Deal,” which used government spending to help the U.S. out of the Great Depression in the 1930s.
Johnson is trying to borrow some of Roosevelt’s optimism but his program is falling short of the original in economic terms. Total spending over the course of the New Deal was about 40% of U.S. output in 1929, according to the the St Louis Fed. The 5 billion pounds outlined by Johnson so far is a little more than 0.2% of the U.K. GDP in 2019 — albeit over a shorter time-frame.