Furlough not perfect but prevented mass unemployment, Sunak says

Rishi Sunak has said not all jobs could be saved during the Covid-19 pandemic, but the government was able to prevent mass unemployment.

The former prime minister, who was chancellor at the time, said it “wasn’t going to be possible to save every person’s job”.

But he said the government was “successful in preventing mass unemployment” and the impact of the pandemic on employment was “considerably better than what anyone had forecast at the early stages of the pandemic”.

Sunak also said there was “not a playbook” to deal with the economic shock caused by Covid, with ministers “dealing with something no one had dealt with before”.

The former PM was giving evidence to the public inquiry into the pandemic on Monday, answering questions on the policies he set out to support workers’ incomes and keep businesses afloat.

He said that at the outbreak of the crisis, there was an “enormous amount of uncertainty”, with policymakers and experts unsure of the scale and duration of the virus and how the population would respond to any measures imposed by the government.

“There was not a toolkit, there was not a playbook that you could pull of the shelf that said this is how you tend to deal with pandemics in the same way you somewhat have with other economic shocks or financial shocks,” he said.

Over the past three weeks, the inquiry has been delving into the economic response to the pandemic, hearing from former ministers, treasury officials and central bankers.

A key finding from the Covid inquiry last month was that the government did not take the virus seriously enough until it was “too late”, with February 2020 a “lost month” for action.

Sunak’s appearance on Monday was the second time he has taken the stand, after previously giving evidence in December 2023 when he was still prime minister.

He was appointed chancellor of Boris Johnson’s government on 13 February, and was preparing to present a Budget before the pandemic hit UK shores and the country was put into lockdown a month later.

Sunak told the inquiry that one of his priorities was to prevent mass unemployment and said “speed was paramount” in the government’s response.

He said there was an “acknowledgement” in the Treasury that they were not going to “get everything right straight away”.

“We could not let perfect be the enemy of the good,” he said. “We had to get things out fast.”

Sunak said it was not possible “to save every person’s job”, but said that “as it turned out, the impact on living standards particularly for the most vulnerable in society… were stronger that I would have perhaps anticipated going into this and I’m very proud of that”.

The coronavirus job retention scheme, known as furlough, was announced by Sunak in March 2020.

At his previous appearance in front of the inquiry, Sunak defended his Eat Out to Help Out policy, which was one of the government’s policy measures aimed to support businesses reopening after the first lockdown.

Sunak also told the inquiry he was advised by medical officials not to intervene “too early” when the pandemic struck.

“Especially in those early conversations, a lot of what the medical and scientific community were advising us at that time was not to go too early with the various interventions, because they were worried about public acceptance of them,” he said.

The furlough scheme was the centrepiece of Sunak’s intervention in the UK economy, designed to stave off a wave of job losses as the country closed down in the face of the virus.

Richard Wright KC, counsel to the inquiry, said hearings to date had received “generally positive evidence” in relation to the policy.

Sunak said that after the original scheme was rolled out, the government drew up a targeted version of it which “never saw the light of day”.

“We spent an inordinate amount of time over the summer iterating a more targeted version of furlough; hours and hours of work to do exactly that, on the basis that we were moving to a different phase of the pandemic,” he said.

“We did develop something called JSS (Jobs Support Scheme) which never saw the light of day because we had another lockdown.”

Sunak added there “wasn’t a way of targeting that I felt comfortable with”.

Asked to respond to criticism that the furlough scheme could have been shorter or longer, the former chancellor said: “I think this is something where we have to be really careful about hindsight”, but added he believed the approach was balanced correctly.

“If this thing happens again, it’s not obvious to me that there’s some learning from that period that would make it easier for someone in my position to make that balance,” he said.

On support for self-employed workers, Sunak said there were challenges with the scheme, given that those applying had to self-certify.

But he said it was right to support self-employed people and that he would “do it again” if in the same position.