LONDON, June 30 — British Prime Minister Boris Johnson will set out plans to spend the economy out of its coronavirus-induced crisis with a speech on Tuesday promising to fast-track RM26.3 billion (5 billion pounds or US$6.15 billion) of infrastructure investment.
Britain shut down swathes of its economy for nearly three months when Covid-19 threatened to run out of control, forcing the government to borrow tens of billions of pounds to keep companies afloat and limit job losses.
Now, as business gradually restarts, Johnson is looking to move past criticism of his government’s handling of the pandemic by spelling out his plan to repair the economic damage and reshape the country.
But his speech may be overshadowed by an announcement that the government is imposing a lockdown on the English city of Leicester, which has a much higher Covid-19 infection rate than anywhere else in the country.
“This is a government that is wholly committed not just to defeating coronavirus but to using this crisis finally to tackle this country’s great unresolved challenges of the last three decades,” Johnson will say in a speech.
He will draw comparisons between his ambition and Former U.S. President Franklin D. Roosevelt’s “New Deal” programme of the 1930s, which included job-creating public works projects to help the United States recover from the Great Depression.
However, Britain’s recent history shows that infrastructure spending is difficult to deliver.
A new underground train line in central London is over budget and late, as is a north-south high speed rail link, whose predicted cost alone has risen to a reported RM557.6 billion (106 billion pounds or US$130.22 billion), almost double the bill five years ago. After decades of discussing airport expansion at London Heathrow, the project remains mired in legal challenges.
Business welcomed the plans but Adam Marshall, director general of the British Chambers of Commerce, said “they must take shape on the ground swiftly”.
Britain’s main opposition Labour Party also said the government must do more to prevent job losses, which both the Bank of England and government budget forecasters have warned could grow as the government phases out temporary support measures for workers hit by lockdown measures.
The speech will announce that RM26.3 billion (5 billion pounds) of investment in hospitals, schools, roads, and other projects will be accelerated to support jobs and fuel an “infrastructure revolution”.
It is unclear if any new money is being committed, with finance minister Rishi Sunak to set out more details next week.
Johnson has vowed not to repeat the actions of previous Conservative-led governments who responded to the 2007-2009 financial crisis by cutting spending on public services to prioritise fiscal balance and debt reduction.
He was elected by a landslide in 2019 before the coronavirus struck, on a pledge to address imbalances across Britain and spend more on health, education and policing, testing the limits of his party’s reputation for budgetary prudence.
“We will build build build,” he will say according to extracts released by his office. “Build back better, build back greener, build back faster and to do that at the pace that this moment requires.”
— Reuters
