Dualling of the A1 to Edinburgh in Johnson’s building programme
UK and Scottish governments must work together to ensure stimulus spending delivers long-term benefits
Prime Minister Boris Johnson yesterday committed to dualling the whole of the A1 from Newcastle to Edinburgh as part of a £ 5 billion pledge to invest in new transport links between the nations of the UK. But First Minister Nicola Sturgeon was underwhelmed, with no Barnett formula money promised to Scotland.
Nicola Sturgeon has dismissed Boris Johnson’s coronavirus rescue plan for the economy after the Prime Minister pledged to dual the A1 to Edinburgh as part of a £5 billion investment package.
The First Minister said she was “extremely underwhelmed” by proposals that include no new Barnett formula money for Scotland.
Mr Johnson was criticised for unveiling a plan for the UK to “build, build, build” its way out of recession that brings forward existing development plans, while cutting funding for affordable housing in England.
The Prime Minister did commit to dualling the A1 as part of a pledge to investigate new transport links between the nations of the UK, that is also expected to examine a possible bridge across the Irish Sea, and the extension of the Borders Railway to Carlisle.
But a £5bn “New Deal” to invest in hospital maintenance, school refurbishment and road building in England is not expected to result in any new Barnett consequentials for the devolved administrations.
Instead, Edinburgh, Cardiff and Belfast are being urged to use infrastructure cash already allocated to devolved budgets to push ahead with “shovel-ready” projects in their areas.
Mr Johnson’s speech on restarting the UK economy came as official figures confirmed the scale of the challenge ahead, with GDP falling by 2.2 per cent in the first quarter of 2020 – the biggest drop since 1979.
In a speech in the West Midlands, the Prime Minister acknowledged that jobs which existed at the start of the pandemic may be lost forever, and said the furlough scheme that has guaranteed the wages of nine million people cannot continue forever.
But he promised the UK government would not return to the austerity that followed the financial crisis, instead promising a stimulus package inspired by US president Franklin D Roosevelt, who led America out of the Great Depression with his New Deal in the 1930s.
Mr Johnson returned to the theme of his general election campaign, pledging to “level up” parts of the country that had been left behind while London and the south-east prospered.
Chancellor Rishi Sunak will set out a plan to support the economy through the first phase of the recovery next week, Mr Johnson said.
He 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.
But “we cannot continue simply to be prisoners of this crisis” and the country “needs to be ready for what may be coming”.
Mr Johnson said: “We will not be responding to this crisis with what people called austerity, we are not going to try to cheese-pare our way out of trouble,becausetheworldhas moved on since 2008.”
The Prime Minister also faced scrutiny over an apparent cut in the affordable homes programme – what had been promised as £12.2bn over five years at the Budget in March is now being stretched over eight years.
Labour leader Sir Keir Starmersaid:“theprimeminister promised a New Deal, but there is not much that’s new, and it’s not much of a deal.
“We are facing an economic crisis – the biggest we have seen in a generation – and the recovery needs to match that.
“What’s been announced amounts to less than £100 per person, and it’s the reannouncement of many manifesto pledges and commitments.”
Speaking at the Scottish Government’s daily coronavirus briefing in Edinburgh, the First Minister said the package was worth just 0.5 per cent of UK GDP – dwarfed by the scale of President Roosevelt’s New Deal, which amounted to 40 per cent of GDP.
“I hope what the Prime Minister said today is the start of a conversation on fiscal stimulus and not the end,” she said.
“To put it mildly, I am extremely underwhelmed by what has been announced this morning.
“I can often judge the scale of fiscal announcements from what we expect to see in consequentials to devolved administrations.”
Ms Sturgeon added: “Our expectation is there will be no additional consequentials from the Prime Minister’s announcement this morning.
“This is simply shuffling around money that was already in the system.”
Mr Johnson promised a study into future transport links between the nations of the UK – including “cross-sea links” such as the Prime Minister’s proposed bridge between Scotland and Northern Ireland.
And he hailed the role of the UK Government in supporting all four nations in dealing with the coronavirus crisis.
“Now is the moment to strengthen that incredible partnership between England, Scotland, Wales and Northern Ireland,” the Prime Minister said.
While individual projects to be examined by the UK government were not listed, Mr Johnson did say: “When did a government first promise to dual the A1 to Scotland? It was 1992. Well, this government is going to do it.”
There is a considerable political consensus that, such is the dire state of our economy amid the blight of Covid-19, major government spending is needed to get the country back on its feet again – over and above the billions already spent.
Announcing what he called a New Deal for Britain – deliberately referencing Franklyn Roosevelt’s much larger programme of building works that helped lift America out of the Great Depression in the 1930s – Boris Johnson stressed he was “not a communist”. A statement that Conservative politicians don’t usually feel the need to make.
As Roosevelt’s example showed, a stimulus can be an effective strategy, but it is also a risky one. The Government will need to spend the money wisely because if it does not, the country may find itself with an ailing economy and large debts that it may struggle to pay off.
The dualling of the A1 announced by Johnson is an eminently sensible scheme, given how important a link it is between Scotland and England, and will increase pressure on Scotland to follow suit. In addition to making this busy road safer, it should speed up journey times and reduce delays with the associated economic benefits. Other schemes that could be added to a shopping list of stimulus projects for Scotland that make sense in the long-term include the creation of a high-speed rail link between Edinburgh and Glasgow, speeding up the rollout of superfast broadband, and measures to help the ongoing switch from fossil fuels to electricity, particularly in transport and household heating.
Judging by the rhetoric in Johnson’s speech, it sounds like all of these ideas would meet a favourable response. One potential problem in ensuring that Scotland receives the same level of stimulus as the rest of the UK and that the money is spent on the most suitable schemes is the all-too-often rocky relationship between Edinburgh and London.
Given some spending will fall under the Scottish Government’s control, some under the UK’S, there is a risk that a dispute about whether projects should be branded with a Union Jack or Saltire could affect our governments’ ability to make the wisest decisions about where to invest taxpayers’ money.
We don’t really care who takes the credit and suspect the public doesn’t either. Given the extent of the crisis facing the country, both Scotland and the UK, we hope, perhaps against hope, that the political consensus about the need for action can be translated into effective cooperation in the public interest.