In an interview with The Mail on Sunday, The Prime Minister has pledged that there will be no return to “the Austerity of ten years ago” as part of his Government’s plans for a swift post-lockdown economic recovery.
This pledge comes after the UK economy shrank by 20.4% in April, the largest monthly economic contraction on record, and before Mr Johnson is set to detail the government’s economic recovery plan in his speech on Tuesday. This plan will include the creation of a new Infrastructure Delivery Taskforce led by Chancellor Rishi Sunak. Its brief is to examine ways in which new hospitals, houses, roads and major projects currently in the pipeline can be constructed at a quicker pace, removing the ‘bottlenecks’ of their development and delivery. Number 10 hopes a potential building boom will boost jobs and improve connectivity for cities, towns and villages across the country. This commitment was further demonstrated by The Prime Minister saying his Ministers would be ‘doubling down on levelling up’, in order to ‘build our way back to health’.
In addition to this, Boris Johnson stated, ‘We’re going to make sure that we have plans to help people whose old jobs are not there anymore to get the opportunities they need’. These plans come after ex-Conservative Prime Minister, Sir John Major, and former Chancellor, Sajid Javid, urged the Government to exploit the low-interest rates of today and borrow more money, while avoiding tax hikes in the current circumstances.
Therefore, as the Government looks to plough on with the political agenda which they were elected on back in December 2019, the adverse economic circumstances mean that it appears the continued borrowing of billions is here to stay for the moment. This comes after official statistics demonstrated UK unemployment rose by 600,000 between March and May. Nine million workers have had their wages paid by the Government under its furlough scheme. Economists have warned the full economic consequences of the Covid-19 pandemic on employment and the economy more generally, will not be seen until all support schemes come to a complete end in October. A new House of Commons Library analysis, commissioned by the Labour Party, suggests unemployment levels could soar to those of the early 1980s and potentially surpass the peak of 1984 – a figure of 3.3 million unemployed.
Shadow business secretary Ed Miliband accused the government of ‘pulling the rug from under’ many parts of the economy by telling firms they will have to start paying towards the furlough scheme from August. Continuing his remarks, Mr Miliband also said that there needs to be a bridge between the end of the furlough scheme and the start of a job creation programme. He added that, as the UK is going through potentially the worst economic recession in 300 years, the government should announce a summer Budget this year.
Directly addressing reports that the PM wants to help areas previously affected by austerity by his commitment to ‘levelling up’, Mr Miliband declared: ‘There’s a Grand Canyon between his rhetoric and the reality’. Only time will tell whether the Government will keep its promise, or indeed be able to, considering large swathes of the economy remain closed or are operating at a reduced capacity.