London Daily

Focus on the big picture.
Wednesday, Jul 16, 2025

Covid shows need for bigger government role, says Starmer

Covid shows need for bigger government role, says Starmer

The Covid-19 crisis has shown the government needs to play a bigger role in the economy permanently, Labour's leader will argue on Thursday.

In a speech online, Sir Keir Starmer will say the pandemic has "shifted the axis" on the size of the state in a similar way to World War Two.

And he will add there cannot be a "return to business as usual" in the wake of the virus.

He will also call for business support to be extended at next month's Budget.

The government says it has spent £280bn to help the economy through the pandemic, including tax breaks, grants and wage support for workers.

Chancellor Rishi Sunak is due to set out the "next phase of the plan to tackle the virus and protect jobs" in his Budget speech on 3 March.

In his speech on Thursday, the Labour leader will accuse the Conservatives of creating an "insecure and unequal economy" that has been "cruelly exposed by the virus".

He will say the Budget will mark a "fork in the road," and argue for a new partnership between "an active state and enterprising business".

Sir Keir, who has faced criticism over his party leadership in recent weeks, will use the speech to set out new policies for "long-term security to the economy".

And he will try to keep up pressure on ministers ahead of the Budget by reiterating his party's calls for the government to:

*  Extend the weekly £20 increase to universal credit benefits, introduced last year, beyond its scheduled end-date on 31 March

*  Extend the business rates holiday and VAT cut offered to firms in the leisure and hospitality sectors beyond April

*  Give local councils "the funding they need" to avoid having to use new powers to raise council tax by up to 5%.

He will say: "To invest wisely and not to spend money we can't afford. Those are my guiding principles."

"But I think that Covid has shifted the axis on economic policy: both what is necessary and what is possible have changed," he will add.

"The age in which government did little but collect and distribute revenue is over. The mistakes of the last decade have made sure of that.

"I believe people are now looking for more from their government - like they were after the Second World War."

He will say the pandemic should provide a "call to arms" akin to the WW2-era Beveridge report, which laid the foundations for the UK's welfare state.

And he will say the damage to the British economy from Covid has been worsened "because the foundations of our society had been weakened over a decade".

Budget pressures


A Budget had been expected to take place in autumn last year, but it was delayed until next month because of the coronavirus pandemic.

Covid restrictions have prompted the government to spend billions in unprecedented interventions aimed at keeping the economy afloat during the crisis.

These have included the furlough wage support scheme to help firms pay employees, and grants for people who are self-employed.

This has pushed up UK debt to £2.13 trillion, equivalent to 99.4% of gross domestic product (GDP), a level not seen since the early 1960s.

Support for the economy has pushed borrowing for this financial year to £270.8bn - £212.7bn more than a year ago, according to latest official figures.

The chancellor is under pressure from MPs and industry groups to extend support measures - but also to spell out when and how the UK's debts can be paid down.

Newsletter

Related Articles

0:00
0:00
Close
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Jeff Bezos Considers Purchasing Condé Nast as a Wedding Gift
Ghislaine Maxwell Says She’s Ready to Testify Before Congress on Epstein’s Criminal Empire
Bal des Pompiers: A Celebration of Community and Firefighter Culture in France
FBI Chief Kash Patel Denies Resignation Speculations Amid Epstein List Controversy
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
South African Police Minister Suspended Amid Organised Crime Allegations
Nvidia CEO Claims Chinese Military Reluctance to Use US AI Technology
Hong Kong Advances Digital Asset Strategy to Address Economic Challenges
Australia Rules Out Pre‑commitment of Troops, Reinforces Defence Posture Amid US‑China Tensions
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
U.S. Resumes Deportations to Third Countries After Supreme Court Ruling
Excavation Begins at Site of Mass Grave for Children at Former Irish Institution
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Defends Attorney General Pam Bondi Amid Epstein Memo Backlash
Renault Shares Drop as CEO Luca de Meo Announces Departure Amid Reports of Move to Kering
Senior Aides for King Charles and Prince Harry Hold Secret Peace Summit
Anti‑Semitism ‘Normalised’ in Middle‑Class Britain, Says Commission Co‑Chair
King Charles Meets David Beckham at Chelsea Flower Show
If the Department is Really About Justice: Ghislaine Maxwell Should Be Freed Now
NYC Candidate Zohran Mamdani’s ‘Antifada’ Remarks Spark National Debate on Political Language and Economic Policy
President Trump Visits Flood-Ravaged Texas, Praises Community Strength and First Responders
From Mystery to Meltdown, Crisis Within the Trump Administration: Epstein Files Ignite A Deepening Rift at the Highest Levels of Government Reveals Chaos, Leaks, and Growing MAGA Backlash
Trump Slams Putin Over War Death Toll, Teases Major Russia Announcement
Reparations argument crushed
Rainmaker CEO Says Cloud Seeding Paused Before Deadly Texas Floods
A 92-year-old woman, who felt she doesn't belong in a nursing home, escaped the death-camp by climbing a gate nearly 8 ft tall
French Journalist Acquitted in Controversial Case Involving Brigitte Macron
Elon Musk’s xAI Targets $200 Billion Valuation in New Fundraising Round
Kraft Heinz Considers Splitting Off Grocery Division Amid Strategic Review
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
EU Proposes New Tax on Large Companies to Boost Budget
Trump Imposes 35% Tariffs on Canadian Imports Amid Trade Tensions
Junior Doctors in the UK Prepare for Five-Day Strike Over Pay Disputes
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
Bitcoin Reaches New Milestone of $116,000
Biden’s Doctor Pleads the Fifth to Avoid Self-Incrimination on President’s Medical Fitness
Grok Chatbot Faces International Backlash for Antisemitic Content
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
×