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Tue, 7 July 2020

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Analysis: Boris Johnson’s 'New Deal' is merely an attempt to shore up the Red Wall using Rooseveltian tactics

Analysis: Boris Johnson’s 'New Deal' is merely an attempt to shore up the Red Wall using Rooseveltian tactics

Boris Johnson invoked FDR's 'New Deal' in his plan to help the economy recover (PA)

4 min read

In fiscal terms the Prime Minister’s plans to “build, build, build” bear little resemblance to the original “New Deal”, but the politics behind are surely why it is so attractive to him.

It was clear as soon as the preview of Boris Johnson’s speech in Dudley was released on Monday the figures involved did not warrant genuine comparisons with the colossal regeneration projects of Franklin D Roosevelt.

For starters, the PM was pledging to spend an initial £5billion, around 0.2% of the UK's GDP, while FDR spent 40% of America’s pre-depression output on the recovery.

But it didn’t need the figures to show that. It was obvious from how overtly Number 10 suggested to the public it was like the “New Deal” that it really wasn’t - if you have to explain the comparison, then it hasn’t worked.

Mr Johnson is certainly not the first leader to invoke the famous idea in the 87 years since it was launched. After all, if you are looking for inspiration on how to recover from a depression, the biggest recovery project from the worst depression of all time is not a bad touchstone.

But the 32nd US President was also able to build bi-partisan consensus in support of the plans, which saw his Democratic party hold the White House for seven out of the nine presidential terms from 1933 to 1969 - a detail the historian in the PM will surely not have failed to notice.

The message behind the project will also appeal, as it wasn’t just about building the Hoover Dam and the Lincoln Tunnel, but about solving regional disparities in US, with the South helped to catch up economically with the Northern states through the creation of millions of new jobs.

If that sounds familiar to the PM and his current “levelling up” mantra, then it is certainly not a coincidence.

Indeed, while most of what was outlined was not new money, and essentially a re-tread of the same ideas which won a landslide victory in December, it seems Mr Johnson is using the Covid-19 crisis as a chance to speed up the implementation of the policies which so appealed to the ‘Red Wall’ of North and Midlands seats.

Voters in those traditionally Labour-voting constituencies hated austerity, which is why the PM has moved so decisively to reject that as the way out of this financial crisis if the Tories are to hold on to them.

Instead he is going to rely on a level of 'Big Government' state intervention unheard of for a Conservative leader.

But his bizarre admission that he is “not a communist” highlighted that in attempting to form a new version of Rooseveltism, he clearly has an eye on the American era that followed it - McCarthyism.

The PM does not want the label of being a ‘red under the bed’ from his own side, which is why he went on to extol the virtues of “free market enterprise” too.

And he even suggested the British public don’t just clap for the NHS but for “wealth creators, capitalists and financiers” too, as if to confirm he has not abandoned the principles on which his party exists - small state, fiscal prudence and private enterprise - just yet.

But this is the fine line he now walks - as the Daily Mirror’s political editor Pippa Crerar pointed out after his speech, FDR balanced his spending with higher taxes on the rich.

In response to the Daily Mail’s political editor Jason Groves, Mr Johnson said his natural desire is to cut taxes wherever possible, and he ruled out neither ahead of a fiscal policy announcement by Chancellor Rishi Sunak next week.

Which way the Government chooses to go will show if the Prime Minister really is willing to bury Thatcherism and upend traditional Tory orthodoxy to go in search of his own “New Deal” political consensus, to try and stay in power for years to come.

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