Boris Johnson’s “New Deal”: what it really means
Boris Johnson’s promise to deliver “great change” has resulted in a damp squib – a plan that fails to live up to the moment when transformative change is needed. While other countries in Europe are investing to boost their economies, the UK government is prioritising rhetoric over action.
Today’s announcement does not include any substantial new money and simply amounts to re-packaged spending, pledged during last year’s election campaign.
It’s clear that Boris Johnson’s “New Deal” is far from enough. Here’s the reality.
A lot of rhetoric, no substance from the UK government
In his rhetoric, Boris Johnson went to great lengths to compare himself to President Roosevelt and his transformative “New Deal” that helped lift the US out of the Great Depression.
However, looking beneath the surface, Boris Johnson’s so-called “infrastructure revolution” only represents a tiny 0.2% of the UK’s GDP. In stark contrast, Roosevelt’s investment amounted to 40% of the US’ GDP at the time.
It’s clear that just after the UK’s GDP took a 20.4% hit in one month, our economy requires action on a massive scale rather than more spin from Boris Johnson and Dominic Cummings.
If Boris Johnson were to truly match the ambition of Roosevelt’s plan, the Tories would need to inject a massive £800bn into the economy. £5bn, in comparison, is a drop in the ocean.
Boris Johnson’s £5bn “New Deal” represents just *0.2%* of UK GDP; F.D. Roosevelt’s accounted for 40% of US GDP. My piece on why it’s absurd for the PM to compare the two. https://t.co/ZGDR3DC7fp
— George Eaton (@georgeeaton) June 30, 2020
Failing to meet the scale of the challenge and lacking in ambition
The coronavirus crisis has created an economic crisis that requires an unprecedented response so we can effectively protect Scotland’s jobs, living standards and public services.
Other countries have already acted to meet the challenge by introducing ambitious stimulus packages. For example, Germany announced a stimulus package of £110bn – amounting to 4% of its GDP – dwarfing the UK government’s response.
📄 On Monday @ScotGov proposed the UK needs £80 billion of investment to meet the challenge of #COVID economic recovery.
💷 That would’ve been 4% of UK GDP – in line with Germany’s plan.
🔎 Boris Johnson’s “New Deal” is £5 billion of repackaged Tory plans – 0.2% of GDP. pic.twitter.com/sTEMC7j2WL
— The SNP (@theSNP) June 30, 2020
Completely ignores Scotland in his plans
Boris Johnson ignored Scotland, and the other devolved nations, in his speech – failing to deliver any significant new money for jobs or our economy.
His funding plans yet again show that the “union of equals” is nothing more than an empty slogan: Johnson’s “New Deal” will not generate any significant Barnett consequentials, leaving Scotland short-changed as we prepare for our recovery.
By not going far enough and ignoring Scotland in the process, Boris Johnson is putting Scotland’s recovery at risk.
Unlike the UK government, the Scottish Government has ambitious plans to kickstart our economy. By injecting nearly £80 billion in a real recovery plan, the government could deliver:
- a reduction in VAT for the hospitality and tourism sector;
- a cut in employers’ National Insurance contributions;
- a major investment in low-carbon projects;
- a jobs guarantee scheme for young people;
- an end to the threat of a return to austerity.
If the Tories continue to ignore sensible economic plans in favour of meaningless rhetoric, then it’s time they deliver the devolution of economic powers to Scotland – so we can chart our own path.
Germany announced a stimulus package of 4% of its GDP. The equivalent for the UK would be £80bn. So, not only is £5bn eye-wateringly short of a ‘New Deal’, it falls short of other countries too. https://t.co/sbBQpAi94I
— Kate Forbes MSP (@KateForbesMSP) June 30, 2020
Protecting jobs is an urgent challenge that Boris Johnson has failed to meet
The House of Commons Library has estimated the unemployment rate could rise to 3.8 million if the UK government doesn’t act to protect jobs – as the Scottish Government has repeatedly called for.
It’s clear that only with major investment and a youth jobs guarantee can we take the necessary steps to save jobs at this unprecedented time. Anything short of this, including Boris Johnson’s meaningless posturing, is simply letting Scotland down.
This FDR-style “spending blitz” is:
– equivalent of 0.2% of GDP
– isn’t actually new money
– comes after Tories announced £600bn on capital spending over 5 years in Budget
– is a drop in ocean compared with cuts over last 10 years
So not really FDR-style at all. https://t.co/EdtMag383X
— Pippa Crerar (@PippaCrerar) June 29, 2020
Boris Johnson’s pretend “New Deal” fails to protect jobs, or even acknowledge the pressing need. It’s simply not good enough.
It doesn’t even begin to make up for a decade of austerity
A decade of brutal Tory cuts has already weakened our economy, increased the sense of insecurity people feel, and has left the UK dreadfully unprepared for this pandemic.
Now, at a time when a solid plan for recovery is urgently needed, it’s evident that Boris Johnson’s Tories are not interested in building a fair recovery for all.
They have rejected clear plans from the Scottish Government, and instead are pursuing their own ideologically driven agendas.
Only this week, this Tory government announced the return of the cruel benefits sanctions regime, as record numbers are claiming Universal Credit.
Boris Johnson is a Prime Minister who is more interested in spending £900,000 on painting a luxury VIP plane than supporting families. We deserve better.
BJ is definitely no FDR
🇺🇸 FDR New Deal: 40% of GDP
🇩🇪 German stimulus: 4% of GDP
🇬🇧 UK ‘New Deal’: 0.2% of GDP
Johnson’s £5 billion announced today is just half of the sum of tax cuts handed out to high earners last year
— STUC (@ScottishTUC) June 30, 2020