Boris Johnson will on Tuesday announce the acceleration of £5bn of infrastructure projects, including hospital maintenance works and a school building programme, which he hopes will help Britain build its way out of the Covid-19 slump.
The British prime minister will aim to present himself as a modern-day Franklin D Roosevelt, promising a “new deal” to invigorate the economy.
But his list of priority projects, including repairing a bridge in Sandwell in the West Midlands, may lead to accusations that he is drawing unlikely comparisons with Roosevelt’s New Deal of the 1930s, which spawned mega projects such as the Hoover Dam.
In a speech in the midlands, Mr Johnson will look beyond the coronavirus crisis and map out an agenda for recovery and regional revival. But while he will promise to “build, build, build”, his announcements only represent part of the money set aside for capital projects in this year’s Budget and will not mean a new stimulus for the economy, government officials said.
Rishi Sunak, chancellor, will make a summer statement next week focusing on jobs and training and will also consider targeted measures for a stimulus, including the possibility of a temporary VAT cut for the hospitality sector.
Mr Johnson’s first big public speech since the pandemic hit Britain will attempt to relaunch the prime minister’s plan to “level up” the country with increased investment in the regions.
“It sounds positively Rooseveltian,” Mr Johnson will say. “It sounds like a New Deal. All I can say is that if so, then that is how it’s meant to sound and to be — because that is what the times demand.”
Mr Johnson will say the government has shown in its response to the pandemic that it wants to “put its arms around people at a time of crisis”, but that it now wanted to tackle “the country’s “great unresolved challenges of the last three decades”.
The prime minister’s New Deal rhetoric borrows not just from FDR but also from Tony Blair’s flagship workfare programme of the 1990s. His promise of an infrastructure boom is also reminiscent of former chancellor George Osborne’s “We are the builders” speech of 2015.
The programme of accelerated projects includes £1.5bn for hospital maintenance, £100m for road projects, £1bn for the first phase of a new school building programme, £200m for further education colleges, £142m for digital upgrades and maintenance for law courts, and £900m for shovel-ready local growth projects such as improving high streets.
Pat McFadden, Labour Treasury spokesman, said: “Unlike Boris Johnson, who promised a garden bridge that was never built and an island airport that remains a pipe dream, FDR actually delivered and rescued the United States from the Great Depression.”
Although the money announced by Mr Johnson will be new for the recipients of the cash — with individual projects to be identified — it will not add extra demand to the economy. That is instead planned to be included in Mr Sunak’s summer economic update next week.
The chancellor will assess the state of consumer confidence in Britain — and in other countries that have lifted lockdowns — before deciding how much of a stimulus he needs to inject into the economy. A final decision will be taken after this Saturday when pubs and restaurants reopen.
Mr Sunak’s Budget increased public sector gross investment by £6.8bn in 2020-21, according to the Office for Budget Responsibility, to a total of 111.9bn, although the fiscal watchdog already assumed that the government would not succeed in spending all the money it had allocated to capital spending.
Mr Johnson will announce that details of the government’s long-term plan for big investments — the delayed National Infrastructure Plan — will be published in the autumn, including rail, road, energy, waste and flood defence projects.