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Johnson Looks Past Crisis With Payday for English Schools

Andrew Atkinson

(Bloomberg) -- Schools in England are set for a 1.8 billion-pound ($2.2 billion) boost as Prime Minister Boris Johnson seeks to reclaim the political agenda after weeks of criticism over his handling of the coronavirus pandemic.The first rebuilding program since 2014 will see work begin on 50 schools projects as part of a 10-year plan, Johnson will announce on Monday. The estimated cost is over 1 billion pounds, with a further 760 million pounds for repairs and upgrades.

Johnson will this week attempt to reboot his struggling administration after three months of lockdown that’s battered the economy and left him facing accusations that ministers bungled the response to the pandemic.

Ahead of a key speech on Tuesday, he ruled out a return to the austerity that followed the 2008 financial crisis and said the government is planning to spend big money on infrastructure to jump-start an economy facing the worst slump in at least a century.

Johnson, who has been overtaken by opposition Labour Party leader Keir Starmer as the public’s preferred choice for prime minister, is trying to return to the policy platform that handed his Conservative Party a landslide election victory in December: a focus on “leveling up” left-behind regions of the country.

Friends in the North

The schools rebuilding program will include “substantial investment” in northern England and the Midlands, areas where dozens of pro-Brexit Labour strongholds fell to the Tories for the first time. Johnson needs to keep these seats to stay in power.

“All children deserve the best possible start in life, regardless of their background or where they live,” Johnson, educated at Eton College and Oxford University, will say. “As we bounce back from the pandemic, it’s important we lay the foundations for a country where everyone has the opportunity to succeed, with our younger generations front and center of this mission.”

The problem for Johnson is there’s no guarantee the economy will bounce back as quickly as he hopes. Few economists now predict a V-shaped recovery, and the longer the economy remains down, the more likely it is to incur permanent damage. At the same time, easing virus-related restrictions too quickly could lead to a devastating second wave of infections, fears fueled when thousands of Britons broke social distancing rules to head to parks and beaches last week.

In other developments this week:

Britain’s most senior civil servant, Mark Sedwill, announced he’s stepping down. His departure as cabinet secretary and national security adviser follows reports of tensions with Johnson’s senior aide Dominic Cummings, who’s been pressing for a wider shake-up of the civil service.The government is on Monday due to review quarantine rules requiring all new arrivals in the U.K. to self-isolate for two weeks. The restrictions came into effect on June 8 and are reviewable every three weeks. Travel and hospitality firms say they deter people from coming to Britain.Leicester could become the first place in England to face a local lockdown after a spike in coronavirus cases. When asked about the possibility on BBC TV’s “Andrew Marr Show” Sunday, Home Secretary Priti Patel said: “That is correct,” adding that the government was providing support to the city.Labour steps up pressure for a full Budget next month and a sweeping package for jobs, including an employment guarantee program for those out of work for a significant period of time. A similar initiative known as the Future Jobs Fund was introduced by Labour in 2009.A Federation of Small Businesses survey finds 62% of small firms have been subjected to late or frozen payments. The Institute for Fiscal Studies says real-time bank account data show falls in employment and incomes showed no sign of unwinding in May, and non-payment of household bills increased further as people struggled to make ends meet.

Stimulus Package

The government is currently paying the wages for 9.2 million furloughed jobs, plus many more in self employment, at a total cost to the taxpayer so far of more than 30 billion pounds. The fear is that many of those jobs could disappear once the programs end in October, particularly in the hard-hit hospitality industry.

With unemployment predicted to reach levels not seen since 1994, Chancellor Rishi Sunak is facing mounting pressure to announce a major jobs program in his planned stimulus package next month.

The Resolution Foundation warned on Monday that job losses could be greater than after the financial crisis over a decade ago, with more than 1 million furloughed workers, many of them young and low-paid, at risk of being put out of work as wage subsidies are phased out.

Income support should continue for workers in vulnerable sectors, or employer National Insurance Contributions thresholds raised to incentive firms to retain staff, the think tank said. It also called for targeted tax cuts; investment in new jobs in key areas such as social care; and job training and guarantees for young people to prevent long-term damage to their prospects.

(Adds comment from Resolution Foundation below second subhead)

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