Why Covid means the big state is back

History suggests that when the state expands in a crisis, it doesn’t go back to its pre-crisis level once the emergency is over. After the first world war, the Lloyd George government extended unemployment insurance to most of the workforce, fixed wages for farm workers and introduced rent controls. The second world war led to Attlee’s nationalisations, along with the creation of the NHS and the modern welfare state. In the magazine this week I ask if Covid will lead to a permanently bigger state.

Last year, state spending exceeded 50 per cent of GDP for the first time since the end of the war. The question for the Conservatives is how quickly that should be reduced, and how active government should be. This philosophical question is what lies behind the row in government over what to do about rising energy prices.