Boris Johnson's New Deal: Will he 'build, build, build' or bodge – Bill Jamieson

Prime Minister Boris Johnson sought comparisons with Franklin D Roosevelt, but Bill Jamieson suggests another US President, Herbert Hoover, or a primary school teacher who’s keen on Lego instead

Will Boris Johnson's New Deal live up to his rhetoric? Bill Jamieson has his doubts (Picture: Steve Parsons/PA Wire)

Is it Boris the builder – or Boris the bodger? Few can fault the Prime Minister for his positivity and rousing calls to action this week. But the problem here is that calls misplaced could result in greater negativity and despair across the country than he – or we – ever bargained for.

“It sounds like a New Deal,” the Prime Minister proclaimed this week as he outlined his plan to rebuild post-coronavirus Britain. “All I can say is that if so, then that is how it is meant to sound and to be.”

His plan is built around a £5 billion programme of accelerated capital spending on hospitals, roads, rail, prisons, courts, schools and high streets. A national infrastructure plan for transport, power generation, flood defences and waste will follow in the autumn. Other investments include £1.5 billion for hospital maintenance and £40 million to boost local conservation projects and create 3,000 jobs.

A ‘Rooseveltian New Deal’? Pull the other one. Not only are the measures he announced this week barely a whisper compared to FDR’s measures in the 1930s – they add up to just 0.2 per cent of last year’s GDP, where FDR’s economic stimulus amounted to 40 per cent of his country’s pre-depression annual GDP.

Even then, its effectiveness is still a matter of hot economic dispute. The US economy was slowing by 1937 and it was the Second World War, not the economic policies of the 1930s, that finally hauled the US out of the Great Depression.

Nor were the measures exclusively Rooseveltian. Many of the policies ascribed to the Roosevelt New Deal were actually put in motion by his predecessor Herbert Hoover.

He increased spending by 48 per cent over the four years of his presidency – the real-terms increase was even larger because this was a period of deflation. Hoover’s proposals in 1932 included a home-loan bank to provide government help to the construction sector; direct loans to state governments for spending on relief for the unemployed; more aid to federal land banks; and the creation of a Public Works Administration that would both better coordinate federal public works and expand them.

Familiar? Arguably this is a more fitting analogy for Johnson – a Conservative administration in a time of unprecedented crisis turning to big-state, high-spend, interventionist measures.

But it not just the grandiose comparison with the FDR era of the 1930s that is bodged, but the all-too-familiar promises of urgent, transformative government action. Reading his speech, it was hard to avoid a numbing sense of deja vu – or deja lu – that set in on hearing the PM’s recital of transformative, “bounce forward” Britain.

“Shovel-ready infrastructure projects” ... have we not heard these announced by Chancellors before? More money for schools and hospitals – of the sort proclaimed in budgets over the past 30 years. Accelerated road repair and improvement? Sorry – so many previous budgets have announced action on potholes that there can hardly be a road in the land that has not been raised three feet by multiple layers of fresh tarmacadam.

“Build, build, build”? But this has been the mantra of the past five Chancellors – Brown, Osborne, Hammond, Javid, now Rishi Sunak. Little wonder construction industry critics were quick to point to shortages of steel, bricks – and skilled building labour.

What’s different this time is the pledge to overhaul and simplify planning procedures. But this, too, is problematic. Central government may want to fire up the bulldozers. But local opinion in many parts of the country is wary of poorly considered development, bodged, overrun projects, green spaces lost and gardens disappearing under concrete.

In any event, is the construction industry capable of pulling off the economic transformation that Johnson urges? “The harsh truth about the construction industry,” wrote one commentator this week, “is that it has been blighted for decades by an adversarial attitude, outdated working practices, a chronic lack of investment and an ageing workforce.”

It faces issues such as low-profit margins and lagging productivity compared to other sectors of the economy. The Office for National Statistics pointed out that over a ten-year time horizon, construction’s contribution to productivity has been “relatively insignificant”.

And is the repeated call for ever-more building as relevant to the immense problems that face us today – the decimation of the service sector and tens of thousands of lost hospitality jobs, the urgent need for workforce re-training and the imperative to rapidly expand a digital economy fit for the 21st century?

The speech itself was no vaulting feat of Rooseveltian oratory – more akin to a primary school teacher enthusing on the virtues of Lego.

Within central and local government there is much bureaucratic inertia to overcome for the Lego bricks to be deployed. However, perhaps the July budget may do what Boris failed to do this week.

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