British Prime Minister Boris Johnson said Monday the coronavirus crisis needed the type of massive economic response US president Franklin D. Roosevelt mobilised to deal with the Great Depression. The Rooseveltian approach to economy saw an increase in public spending during the Great Depression, which was successful in creating unemployment and staving off inflation, allowing the United States to get back on its feet after the massive stock market shock.
Boris Johnson channels FDR's New Deal on @TimesRadio: "You can't at this moment go back to austerity. That would be a mistake. This is the moment for a Rooseveltian approach to the economy”.
— Tom Newton Dunn (@tnewtondunn) June 29, 2020
Johnson told The Times newspaper’s new radio station that Britain was heading for “bumpy times” as it struggles through its biggest economic contraction on record. He has also vowed to emulate the policies of Roosevelt to lift the UK out of the economic depression that has been set into motion by the virus.
Rooseveltian approach to economy the need of the hour: UK PM
He intends to unveil a spending programme in a speech Tuesday his office has simply dubbed “build, build, build”.
“I think this is the moment for a Rooseveltian approach to the economy,” said Johnson. “I really think the investment will pay off.”
Roosevelt launched the New Deal programme in the 1930s that created a comprehensive social care system whose legacy lives on to this day.
The first part of Johnson’s initiative earmarks £1 billion ($1.2 billion, 1.1 billion euros) for school repairs.
Johnson says coronavirus has been 'disaster' for UK and suggests 'Rooseveltian' approach to rebuilding economy
It’s been disaster because of his mismanagement. Follow the money and contracts on rebuilding. It will go to his friends and sponsors. https://t.co/bKPrs0xPK8
— Michael (@therightarticle) June 29, 2020
“The country has gone through a profound shock,” he said.
“We really want to build back better, to do things differently, to invest in infrastructure, transport, broadband — you name it.”
Johnson won an impressive 80-seat majority in December by positioning his Conservatives as more fiscally responsible than the main opposition Labour party.
But the lockdowns imposed globally to fight the new disease have forced even the most prudent governments to unveil social safety nets that will put states deep into debt for years to come.
Lockdown blues to be alleviated through more spending
The true scale of Britain’s unemployment problem will only be revealed once the government’s furlough scheme for temporarily laid off workers begins being rolled backed in August.
The current spending programme has supported nine million jobs and cost the government tens of billions of pounds.
The independent Resolution Foundation think-tank said the government had little choice but to spend even more because “the virus will continue to hold activity below its pre-pandemic level”.
Johnson should try to generate “job creation via direct public investment in social care and retrofitting,” it said in a report.
The ruling Conservative party’s newfound focus on spending comes with Labour trying to recover from its election drubbing that cost the job of its socialist leader Jeremy Corbyn.
New opposition chief Keir Starmer — a trained lawyer with a more pragmatic style — offered to work with Johnson while more than 1,000 people were dying of COVID-19 a day in April.
But that comradery appears to be wearing off as the first wave of the health emergency passes and attention shifts to the economic response.
“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,” Starmer fumed on Monday.
Discontent brews among UK citizenry
Pubs and restaurants along with most of the rest of the hospitality, tourism and leisure sectors in England will reopen next week for the first time since March 20.
But the easing could be delayed in the central English city of Leicester because of a reported spike in new infections.
Leicester mayor Peter Soulsby said he has received instructions from London to postpone the reopenings planned for next week.
Yet he also hinted that the ethnically diverse city of 500,000 was not looking forward to spending more time being kept away from its restaurants and pubs.
The mayor said the government’s assessment of the health problems in Leicester was “superficial”.
“Its description of Leicester is inaccurate and certainly it does not provide us with the information we need if we are to remain restricted for two weeks longer than the rest of the country,” he said.
Leicester City Council’s public health director Ivan Browne said the new infections were mostly being reported among younger people who are less susceptible to COVID-19.
“It’s very much around the younger working-age population,” Browne said.
AFP with additional input by GVS News Desk
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