Covid inquiry live: Rishi Sunak says the government was advised against moving ‘too early’ on Covid decisions
Government advised against moving ‘too early’ on Covid decisions, Sunak says
Sunak recalls that in early conversations the “medical and scientific community” were advising the government against moving “too early” as they wanted the Covid measures to be sustained for a “period” of time so the timing had to be “right” in order to keep the public onside.
He said:
Then ultimately, even at the end that last few days, I think the prime minister said to people it was a voluntary social distancing and to avoid, hospitality and leisure on the basis, on the advice from the scientists. And schools were not closed at first. Then the advice was that they should be closed. And that was followed, immediately.
And then even at that point, there was a belief that that voluntary social distancing, together with school closures, if there was, I think the number was 75%, compliance, would be sufficient to manage the virus, to deliver the health outcomes.
And then 2 or 3 days after that was said, it was decided that wasn’t going to be, achievable, which is why you had to move to a full mandatory lockdown.
He stressed that the scientific advise was rapidly changing in the early period of the pandemic in 2020 and there was thinking that the virus could be contained.
Key events
Sunak says he was worried ‘about the UK’s ability to fund itself’ at one point
Reflecting on the chaos in the early days of the pandemic, Sunak says he was worried at one point “about the UK’s ability to fund itself”, an experience he described as “acutely stressful”.
Speaking about the fluctuations in the gilt markets at the time, the former chancellor said the period “was intense and filled with anxiety, certainly for me”. The market for UK government bonds, also known as gilts – the oldest major asset market in the world – was witnessing unprecedented turmoil in early spring 2020).
Sunak said:
I’d been chancellor for, you know, what felt like five seconds and then you could see a very material tightening in UK financial conditions …
And in the end, we, you know, we organised with the, the Bank of England something called the Ways and Means facility, which I’ve, talked about in my evidence, which thankfully we never needed to, to use, but essentially as a backstop for the government if it can’t raise the money it needs on the bond markets, it can go to the Bank of England, instead for a temporary period of time. And it was last used again in the financial crisis.
Sunak knew there was ‘no such thing as a free lunch’ and taxes would need to rise due to high levels of state support
Sunak says it was right for the state to intervene so heavily during the pandemic, something that he says went against his instincts as a fiscal Conservative who prefers low government borrowing and spending.
He said it was not time “for ideology” during the pandemic – a “unique crisis”– which required that level of state intervention that Sunak said would be in the country’s long-term interests.
“Of course, I knew that, you know, there’s there’s no such thing as a free lunch,” he said, adding that in the spring 2021 budget he implemented tax rises to put public finances on a “sustainable trajectory”.
Sunak says he didn’t leave the tab to be “picked” up by future administrations.
Sunak says government’s ‘biggest fear’ going into the pandemic was ‘mass unemployment’
Sunak says the government was successful in “preventing mass unemployment”, which was the “biggest fear” in the early stages of the pandemic, as he suggested this could have led to a breakdown in social order.
He said there were projections that had about 12% unemployment rates, which would mean millions of people without a job.
The number of people in work fell by 825,000 people between January-March 2020 and October-December 2020, while unemployment rose by almost 400,000 and the number of people who were economically inactive rose by 327,000, according to House of Commons library research.
Sunak says the impact of the pandemic on household incomes and living standards, particular for the most vulnerable people in society, were not as negative as had been forecasted. He said he would get into the details in a later section of the hearing.
It wasn’t going to be possible to save every single job during the pandemic, Sunak says
Sunak says that in the early days of the pandemic his priority was to protect people’s jobs, household incomes and to ensure businesses did not fail.
He said there was no “perfect science” to the decisions he made and acknowledged he was constantly weighing difficult economic trade offs when formulating policy.
“It wasn’t going to be possible to save every single person’s job, and people were going to experience economic hardship as a result of what was happening,” Sunak said.
“I thought it was important to be honest with people about that upfront.”
Government advised against moving ‘too early’ on Covid decisions, Sunak says
Sunak recalls that in early conversations the “medical and scientific community” were advising the government against moving “too early” as they wanted the Covid measures to be sustained for a “period” of time so the timing had to be “right” in order to keep the public onside.
He said:
Then ultimately, even at the end that last few days, I think the prime minister said to people it was a voluntary social distancing and to avoid, hospitality and leisure on the basis, on the advice from the scientists. And schools were not closed at first. Then the advice was that they should be closed. And that was followed, immediately.
And then even at that point, there was a belief that that voluntary social distancing, together with school closures, if there was, I think the number was 75%, compliance, would be sufficient to manage the virus, to deliver the health outcomes.
And then 2 or 3 days after that was said, it was decided that wasn’t going to be, achievable, which is why you had to move to a full mandatory lockdown.
He stressed that the scientific advise was rapidly changing in the early period of the pandemic in 2020 and there was thinking that the virus could be contained.
Sunak says officials were not set up with Teams in early days of pandemic
Sunak said in the early couple of weeks people were “all new to working from home” so had to adjust to the new technology.
“We were not set up with all the things like teams and everything else. There wasn’t, I think, even the right set of plug sockets … in the Chancellor’s meeting room in number 11 Downing Street,” he said.
Sunak said people, in the first couple of days, were “crowding round kind of almost sitting room” because that was where you could “plug in all the various things and have a conference call”.
He went on to express his gratitude to his team who got him what “he needed’” to do his job.
The government ‘couldn’t let perfect be the enemy of the good’, Sunak says
Responding to a question from the chair about having to devise policies quickly, Sunak says the government “couldn’t let perfect be the enemy of the good”.
He said:
There was an acknowledgment early on when I was talking to the team that, of course we weren’t going to get everything right straight away.
That would have been, you know, surprising given the speed at which we were operating and the scale of the interventions we were designing, and putting in place.
And so there was a recognition upfront and I, you know, encouraged the team to be comfortable with that, that that was OK. Right? We couldn’t let perfect be the enemy of the good. And we were going to have to acknowledge that we would iterate as we go.
Sunak has stressed that one of the priorities was to prevent unemployment and said that in the context of a pandemic there should have been a recognition that things had to get “out fast” as otherwise the consequences would have been “severely negative”.
Sunak cautiously says the government will be in a better position to deal with a future pandemic, but stresses that all pandemics will be unique and will require an agile response to specific circumstances.
Sunak said:
My overarching reflection would be we have learned an enormous amount, having been through this once, and we have a set of tools that we developed, we iterated and no doubt can be improved in the future.
But I would slightly guard against the idea that whatever happens next time, you can pull something off the shelf.
And as you said, just kind of go right, line one line two, plug it into a machine and off you go. Each economic shock. Each economic crisis is going to be slightly different. And it’s important for policymakers at that moment to be agile and responsive to the situation they face and not be so mechanically thinking, OK, just as we did this last time, it’s the right thing to do in exactly the same way.
Sunak says he initially thought there would be a temporary ‘economic shock’ lasting ‘several weeks to a few months’
Sunak says officials knew there was “going to be an economic shock” from the pandemic but they understood these impacts were going to be “temporary”.
The former chancellor told the Covid-19 inquiry:
I think our understanding at the beginning was that it would last several weeks to a few months. And what we were focused on, on doing is making sure that the temporary shock did not have long term serious economic consequences.
