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Boris Johnson has warned the public that the jobs many people had in January will not come back once the coronavirus furlough scheme is lifted.
The prime minister said the country was facing a “real, real crisis”, raising the prospect of mass unemployment once the government’s jobs retention scheme is phased out over the coming months.
He promised his response to the expected deep recession would not be a return to austerity but instead a spending stimulus package modelled on US president Franklin D Roosevelt’s new deal, which helped lift America out of the Great Depression in the 1930s.
But Labour accused Johnson of “fraud”, insisting Roosevelt’s relative spending dwarfed the government’s plans many times over and pointing out there had been a cut in the budget for affordable housing.
The PM also faced accusations of reheating announcements from the Tories’ 2019 election manifesto.
Appearing in Dudley in the West Midlands behind a podium emblazoned with the slogan “build build build”, Johnson set out a raft of infrastructure spending announcements as well as an “opportunity guarantee” to ensure every young person has the chance of apprenticeships or in-work placements.
Johnson said he hoped the overall package would foster the creation of thousands of high-paid, high-skilled jobs, but refused to say exactly how many.
And he warned the public: “We know in our hearts that the furloughing cannot go on forever and as the economy recovers we also know that jobs that many people had in January are also not coming back, or at least not in that form.
“And we know that that’s the biggest and most immediate economic challenge that we face.”
Johnson went on: “On unemployment and the future for jobs now in this country, of course we face a real, real crisis and we have to deal with it.
“But we are going to deal with it in the most energetic possible way.”
The PM’s announcements also included:
- £1.5bn to be allocated this year to hospital maintenance.
- More than £1bn for a 10-year school rebuilding programme.
- £100m to be spent on road projects.
- £900m for “shovel-ready” local growth projects in England during 2020/21
- A science funding agency to invest in high-risk, high reward projects, and an ambition for the UK to develop the first zero emission long-haul passenger plane he dubbed “jet zero”
- Radical reforms to the planning system.
The prime minister acknowledged “it may seem a bit premature to make a speech now about Britain after Covid” given events in Leicester, where a local lockdown has been imposed.
And he said he would “keep under constant review” whether areas targeted for local lockdowns would need additional financial support as furlough and other schemes wind down, to “ensure that people don’t get penalised for doing the right thing”.
But he stressed: “We cannot continue simply to be prisoners of this crisis,” and said the country “needs to be ready for what may be coming”.
“We’re waiting as if between the flash of lightning and the thunderclap with our hearts in our mouths for the full economic reverberations to appear,” he said.
Johnson also sidestepped questions on whether he would rule out pay freezes in the public sector, saying: “Of course we will be looking at the independent public sector pay review body and seeing what they say.”
Chancellor Rishi Sunak will set out a plan to support the economy through the first phase of the recovery next week, Johnson said.