U.K. Government Plans Modern Day Version of ‘Roosevelt’s New Deal’

By Peter Collins
Peter Collins
Peter Collins
January 5, 2009 Updated: February 27, 2012

Britain's prime minister Gordon Brown has unveiled plans to create 100,000 jobs, along the lines of a 1930s American-style program of public works, to beat the recession.

His plan to use public money to create thousands of jobs will be seen as a re-enactment of Roosevelt's New Deal—a huge program of public works, building dams and roads, to help America recover from the Great Depression in 1930.

To keep unemployment down the government will invest in school repairs, new rail links, hospital projects and develop a new digital age by investing in super-fast broadband. The plan also includes building a low-carbon economy for the future.

Speaking to The Observer the prime minister said: "I want to show how we will be able, through public investments and public works, to create probably 100,000 additional jobs over the next period of time in our capital investment program—schools, hospitals, environmental work and infrastructure, transport. We are not going to stand by and allow nothing to be done when people are facing difficulties."

He said that one priority will be jobs in digital industries, while 30,000 jobs will be in school repairs which should help private construction firms ravaged by the downturn.

Brown suggested infrastructure such as high-speed broadband could be the modern equivalent of Roosevelt's New Deal.

"When we talk about the roads and the bridges and the railways that were built in previous times—and those were anti-recession measures taken to help people through difficult times—you could [by comparison] talk about the digital infrastructure and that form of communications revolution at a period when we want to stimulate the economy. It's a very important thing."

Brown added that the program will be funded by new money drawn partly from reserves.

In response to the proposals, shadow works and pensions secretary, Chris Grayling said, “I am extremely skeptical about the announcements which were headline grabbing with very little substance.

As a nation we have run out of cash, we've got a debt crisis and the things the government said it would do to try to tackle these difficulties are just not working," he told the BBC.

"The reality is it's only a month since the government delayed its biggest public works project—the project to build new aircraft carriers—because it said it had run out of money," he added.

The Liberal Democrat's treasury spokesman Vincent Cable commented that although Brown's plans were similar to their own, he was not convinced they would be implemented properly.

“The plan to create 100,000 jobs was coming as perhaps a million were going to be lost. The key point is to make sure the banks are lending again. The problems are in part because of a paralysis with decision making because they are being set contradictory objectives." he added

In order to save jobs, the prime minister announced that he intends to kick start the banks to resume lending. He promised new measures to help firms with good long-term prospects to obtain credit: "Clearly we have banks that were willing to take large numbers of risks a year or two ago and people are now averse to risk—so we have got to create the conditions in which it's possible for banks to resume lending."

The prime minister plans to attend a jobs summit involving government, business and unions after touring the country this week.

Peter Collins
Peter Collins