Don’t believe Johnson’s bluster; there is no Tory ‘New Deal’ to save the economy

Boris Johnson defended the Tory strategy to save Britain’s tanking economy during Prime Ministers Questions yesterday (1 July 2020) as the country continues to grapple with the COVID-19 pandemic and the resulting economic shock.

Responding to meek criticism from the Labour Leader, Sir Keir Starmer, the Prime Minister boldly declared that the “We’re the builders, they’re the blockers. We’re the doers, they’re the ditherers”.

Notwithstanding Johnson’s pompous performance yesterday, the credibility of the government’s economic plan is now in doubt across the political spectrum.

The Prime Minister at a speech in Dudley in the West Midlands on Tuesday promised that the government would invest over £5 billion and “build, build, build” to soften the economic blow of COVID-19 to protect “jobs, jobs, jobs”. It all sounded fairly simple.

Government press briefings and prepping alluded to a self-styled Tory ‘New Deal’ in the run up to the key speech.

Woodrow Wilson’s New Deal in the 1930’s was a massive programme of state investment and capital projects targeted at lifting the USA out of the Great Depression.

Johnson appears to have dropped the appropriation of the name after some harsh media treatment, with many pointing out that the re-announcement of repairs to some bridges in Sandwell couldn’t be compared to construction of the Hoover Dam.

The PM’s claims have been rubbished by Britain’s trade unions too, with it becoming clear that all the so-called pledges are just a re-announcement of existing government money already allocated:

  • Wilson’s New Deal lasted for a number of years with spending between 5% and 7% of GDP each year. Johnson’s £5 billion would be less than 0.25% of GDP if it is spent in a single year, which is unlikely.
  • An increase in hospital spending of £1.5 billion was announced before the speech for construction and repairs. In fact, the Tories have cut the overall NHS budget by over 7% in England since 2010 and there is an existing backlog of £6.5 billion already needed to fix problems in NHS buildings.
  • The government pledged £100 million for road and rail projects. The only problem being that this is a very small amount for 29 projects of this scale and the money isn’t new. It was set out in the Spring Budget.
  • Johnson also promised radical reforms to the housing sector to build “fantastic new homes” however no new money was announced, only existing spending commitments. Many have pointed out that rather than planning constraints and green belts holding back house building, ‘land banking’ is a huge problem in the sector. Research by the charity Shelter found that 280,000 homes were given planning permission in England between 2011 and 2016 but were never built.
  • The PM repeated Monday’s pledge of £1 billion for 50 school-building programmes starting in September 2021. Again this comes from the Spring Budget and there were no details of which 50 schools will receive the money. The ‘additional’ £200 million for further education promised also transpires to be funding brought from some of the £1.5 billion pledged over five years promised in the Conservative manifesto for further education.
  • The government reiterated a promised to plant over 75,000 acres of trees (about 30,000 hectares) every year by 2025 but successive Tory government’s have failed to meet their own targets and England has one of the worst records in Europe.

YCL General Secretary Johnnie Hunter said, “What we are seeing here is the mask slipping from this Tory government even before we are through the worst of this crisis. Not only that, we can see that Britain’s ruling class and their political party are politically and ideologically bankrupt.”

He added, “They have nothing new to offer working people, no New Deal, just more of the same – austerity, increasing unemployment and crippling attack on our communities. The cruel and anti-worker nature of this government was emphasised by their decision to reintroduce benefits sanctions this week as job centres reopen. At a time when hundreds of thousands are losing their jobs, Johnson’s offer to them is risk contracting the virus or starve.”

The General Secretary concluded, “If Johnson really wanted to protect jobs, the Tories would have introduced a ban on redundancies which the Communists have called for since February. Instead, tens of thousands of job losses are being announced every week and they are doing nothing., If they really wanted to build the economy, they would intervene to stop the factories which are being shutdown or mothballed as we speak. They would invest in manufacturing which could provide real jobs and apprenticeships.

“£1,300 billion was handed over by the British state to rescue City of London banks and markets during and after the 2007-8 financial crisis. Now we’re being told £5 billion and re-announcing budget spending is a ‘New Deal’ sufficient to shore up the country after one of the biggest economic shocks in our lifetimes.”

Tory Chancellor Rishi Sunak has confirmed he will deliver a further economic update on 8 July 2020 “setting out the next stage in our plan to secure the recovery”.

Challenge News Desk

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