Boris Johnson today vowed to keep splashing the cash despite mounting government debt as he insisted the coronavirus crisis can be an ‘opportunity for change’.
The PM said he will ‘double down’ on investment in ‘levelling up’ the UK, comparing the effort to Franklin D Roosevelt’s New Deal following the Great Depression in the US in the 1930s.
Unveiling a billion-pound upgrade of school buildings as the first step in his revival programme, Mr Johnson said the ‘nightmare’ of the pandemic would not mean a return to ‘austerity’ – insisting that would be a ‘mistake’.
But he also suggested that there will not be a Budget until the Autumn, despite Keir Starmer demanding a new financial plan next month.
There are mounting concerns about the public finances as lockdown wreaks havoc on the economy. The government is expected to borrow £300billion this year with huge costs from the furlough scheme and other bailouts, and total debt has hit £2trillion.
The Bank of England revealed last week that the government might have effectively gone bust unless it had intervened to provide cash at the start of the crisis.
However, speaking on Times Radio, Mr Johnson said: ‘This is the time to invest in infrastructure, this is the time to make those long-term decisions for the good of the country.
Boris Johnson (pictured on a visit to a school construction site in London today) said he will ‘double down’ on investment in ‘levelling up’ the UK, comparing the effort to Franklin D Roosevelt’s New Deal following the Great Depression in the US in the 1930s
Unveiling a billion-pound upgrade of school buildings as the first step in his revival programme, Mr Johnson said the ‘nightmare’ of the pandemic would not mean a return to ‘austerity’ – insisting that would be a ‘mistake’
Public sector debt was fractionally below two trillion pounds at the end of last month – equivalent to 100.9 per cent of GDP
‘You have to be careful, and the Chancellor will be setting out our plans in the Spending Review in the autumn.
‘But, in the end, what you can’t do at this moment is go back to what people called ‘austerity’ – it wasn’t actually austerity but people called it austerity – and I think that would be a mistake.
‘I think this is the moment for a Rooseveltian approach to the UK.’
Mr Johnson said the coronavirus pandemic had been an ‘absolute nightmare’ and a ‘disaster’ for the country.
‘This has been a disaster, let’s not mince our words, this has been an absolute nightmare for the country,’ he said.
‘The country has gone through a profound shock. But in those moments you have the opportunity to change and to do things better.
‘We really want to build back better, to do things differently, to invest in infrastructure, transport, broadband – you name it.’
He said there will be ‘some bumpy times’ ahead but the UK will get through the economic fallout, adding that people ‘instinctively’ knew it would be tough.
‘We’ve seen a big fall in our GDP and everybody understands as we come out of it there are going to be some bumpy times but the UK is an amazingly dynamic, resilient economy and we’re going to come through it very, very well indeed,’ he said.
The PM insisted now was not the time to ‘step back’ from supporting the economy, adding: ‘The Government will remain very, very much engaged with people, with businesses helping everybody to get through this.
‘We had to put our arms around the UK economy, we had to do the coronavirus job retention scheme, the furlough scheme, all sorts of amazing loans, bounce-back loans and so on, to help businesses, we can’t just now step back.
‘So what we’re going to be doing in the next few months is really doubling down on our initial agenda which was all about investment, if you remember, in infrastructure, in education, in technology, to bring the country together.’
Mr Johnson said that the government spending plans would be unveiled by Chancellor Rishi Sunak in the Autumn Statement, as usual.
Mr Johnson also suggested that there will not be a Budget until the Autumn, despite Keir Starmer (pictured on Sky News today) demanding a new financial plan next month
But speaking on BBC Four’s Today programme, Labour leader Sir Keir said: ‘It’s staggering that in light of the economic crisis that is about to descend upon us that we are not having a July budget that puts jobs at the centre of economic recovery.’
As part of the ‘levelling up’ plan, the Government is making a 10-year undertaking to improve school facilities, along with sprucing up classrooms currently in use.
Downing Street said a £1billion cash injection would see construction work start on the first 50 projects as soon as September 2021.
Another £560 million will go towards school repairs in this financial year, while further education colleges will see £200 million of the £1.5 billion promised by Chancellor Rishi Sunak in his spring Budget to transform college estates over the next five years fast-tracked so that work can be brought forward.
Mr Johnson acknowledged that coronavirus has been a ‘disaster’ for the UK but insisted the country will pull through.
‘This has been a disaster, let’s not mince our words, this has been an absolute nightmare for the country,’ he said.
‘The country has gone through a profound shock. But in those moments you have the opportunity to change and to do things better.’
He added: ‘So what we’re going to be doing in the next few months is really doubling down on our initial agenda, which was all about investment, if you remember, in infrastructure, in education, in technology, to bring the country together.’