The truth about Boris Johnson’s “New Deal” package of infrastructure spending

The prime minister promised a package of Rooseveltian proportions to grow the economy out of its Covid-19-induced torpor. Just how impressive is it really?

Boris Johnson
Johnson: the levelling up begins
(Image credit: © Jessica Taylor/UK Parliament handout/Shutterstock)

What’s happened?

Boris Johnson last week called for the UK to “build, build, build” our way out of the virus-induced recession and announced a “Rooseveltian” New Deal package of infrastructure spending to help us do it. But the invoking of Franklin D. Roosevelt seemed more a political nod to Johnson’s “levelling up” agenda than a credible comparison. Roosevelt increased the US federal government’s spending from under 4% of GDP in 1930 to over 10% by 1939, transforming the US. Overall, his New Deal package amounted to around 40% of national income in 1929 (though the extent to which his government’s spending drove economic recovery remains contested). By contrast, Johnson’s £5bn amounts to 0.2% of GDP. Even the whole package of £640bn in gross capital investment over the course of this parliament, first announced in March, will leave the UK’s public spending at the same level, as a share of GDP, as it was pre-Covid-19.

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Simon Wilson’s first career was in book publishing, as an economics editor at Routledge, and as a publisher of non-fiction at Random House, specialising in popular business and management books. While there, he published Customers.com, a bestselling classic of the early days of e-commerce, and The Money or Your Life: Reuniting Work and Joy, an inspirational book that helped inspire its publisher towards a post-corporate, portfolio life.   

Since 2001, he has been a writer for MoneyWeek, a financial copywriter, and a long-time contributing editor at The Week. Simon also works as an actor and corporate trainer; current and past clients include investment banks, the Bank of England, the UK government, several Magic Circle law firms and all of the Big Four accountancy firms. He has a degree in languages (German and Spanish) and social and political sciences from the University of Cambridge.