PLMR Insights: The PM sets out his “New Deal”

The Prime Minister has today made a speech in Dudley setting out his economic agenda to encourage post-pandemic growth through a “New Deal” to invest in jobs and infrastructure programmes. Below, PLMR run through some of the key themes and announcements Boris Johnson set out:  

Lessons of the crisis – Reflecting on the virus, Johnson admitted his government had made mistakes, but also cited what he regarded as successes, drawing on the pace at which the Nightingale Hospitals were erected, how British businesses met the ‘ventilator challenge’, and HM Treasury’s speed at setting up the Job Retention Scheme. The government is keen to highlight these examples which show that construction and new innovative ideas can be delivered with much more pace and urgency.

Build, build, build – Johnson reiterated the rhetoric of the 2019 General Election, committing the government to upgrading the country through wide-scale investment in transport, schools, science, education and net zero. He said the government would use the crisis to address the unresolved problems of the last few decades, uniting the country, tackling imbalances, and levelling up. Rather than the Covid-19 crisis being a distraction for the government, what we are seeing now is the government trying to move back to its domestic agenda and crucially getting back to delivering its Manifesto commitments, by making these one and the same as the post Covid-19 economic recovery.

No repeat of austerity – Johnson categorically said the UK would not respond to the crisis with austerity, arguing that the world had moved on. He also announced that next week the Chancellor of the Exchequer Rishi Sunak would set out the immediate plan for the recovery. This will be based on a “doubling down of its strategy” – levelling up the country. He said, “the times demand intervention”, one where the government “puts its arms around people in times of crisis”, adding that it was time for a “fair deal for the British people.” Johnson said this will be possible due to the low cost of borrowing and high prospects of growth that will “fuel the animal spirits upon which the UK’s prosperity depends.” It was interesting that the Prime Minister had to spell out he was “not a Communist”, this was certainly a message to some Conservative backbenchers who are increasingly concerned that the government will continue to be as activist and interventionist, as it has been in response to the pandemic. The Prime Minister made a point of saying this was not an attack on the wealth creators or capitalists, linking the risks they take with their own money as being crucial for investment in the UK and ultimately the tax revenues that pay for public services. An 80 seat majority does give the Prime Minister a big hand to chart a different course to what may be expected from a Conservative government, and certainly No 10 would say that it was the very idea of levelling up the entire country that contributed to this 80 seat majority. But expect the tensions between some Conservative backbenchers and the government over how interventionist in the economy and society the government should be to increase over the coming months.

Resolving social care On social care, the Prime Minister said the government are finalising their plans, building a cross-party consensus, and solving a problem that successive administrations had “flunked.” While many administrations have made these promises before, the Covid-19 crisis has put the social care sector under a lot of scrutiny and the government is aware of and will want to act upon the public sentiment behind finding a long-term resolution here.

Opportunity guarantee – Johnson announced that every young person would have the chance of an apprenticeship or in work placement to help them find the right job. On education, he said too many degree courses were not providing value, emphasising that greater investment in further education was needed. The government is keen to champion vocational education and sees it as a crucial part of levelling up the country and spreading opportunity out of the capital and the major cities. This is also linked to the ‘build, build, build’ idea, with the full economic reverberations of the Covid-19 crisis yet to be felt, the government is looking to construction as a key job creator over the immediate to mid-term.

Planning – Johnson said the government would build new homes on Brownfield sites alongside new investment in public services. He announced that he would also oversee the “most radical reform of the planning system since the end of World War II.” He attributed the current system to the reason why procurement projects took 80% longer in the UK relative to other countries, why capital costs are higher by 10-20%, and why the UK is so slow at building homes. He said, “time is money”, and the delays in the UK’s system are a “drag on the prosperity of this country”, adding that the UK would build better, greener and faster.

Transport revolution – Johnson said the government would carry out a study of all transport links between all four parts of the UK, questioning why projects like duelling the A1 to Scotland had never been completed. He added that the crisis had not ended the desire to move efficiently, necessitating transport investment in roads, carbon zero buses and cycle ways. He said, through increasing the nation’s connectivity, “now is the moment to strengthen that incredible partnership between Scotland, Northern Ireland and Wales.”

Science superpower – Johnson said that although the UK can be a “science superpower”, adding that it must end the chasm between invention and application, which currently means British inventions disappearing abroad. He said the government this summer will create a new science funding agency to back “high risk, high reward” projects. He also outlined the need to set its ambitions high, saying that the UK should set the goal now of producing the world’s first zero emissions, long haul, passenger plane.

Full speech can be found here.

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