James Forsyth James Forsyth

The legacy of Covid: a much bigger state

issue 16 October 2021

Covid transformed the role of the state. During the pandemic, the government did things it would never normally even contemplate. At the same time as it restricted civil liberties, it intervened in the economy to an extent never before seen in peacetime. Through the furlough scheme, close to £70 billion was spent on paying people’s wages.

Other government economic interventions seem minor in comparison. What is a few hundred million here and there when the state has been spending billions so regularly?

History suggests that when the state expands in a crisis, it doesn’t revert to its pre-crisis level once the emergency is over. The second world war led to the industry nationalisations of the Attlee government, along with the creation of the National Health Service and the modern welfare state. 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.

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