The Covid-19 pandemic has occasioned a dramatic increase in the economic role of the state. During 18 months of varying degrees of lockdown that required many businesses to shut and made heavy demands on the NHS and other public services, the state paid the wages for nearly 9 million workers, increased welfare provision for the working age poor, and increased spending on public services. Government spending accounted for well over half of the economy in 2020/21, its highest ever level in peacetime. But even now that lockdown is over, the government has unveiled tax and spending plans that imply that public spending will account for a higher proportion of GDP than it has done on a sustained basis at any time since the 1970s, not least thanks to increased spending on health, social care and welfare. Meanwhile, the tax take will be at its highest since the early 1950s. Whereas the government's response to the economic and fiscal shock occasioned by the 2008–9 financial crash was to rein in public spending, this time it has apparently come to the conclusion that the state needs to play a more active role – in the hope that this will enable the country to 'build back better'.

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Curtice, J. 2021, 'Have voters embraced a bigger state?', IPPR Progressive Review, 28(3), pp. 291-307. https://doi.org/10.1111/newe.12264

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Last updated: 03 September 2022
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