On December 15, 2025, former UK Prime Minister and Chancellor Rishi Sunak once again took the stand at the public Covid inquiry, facing tough questions about the government’s economic response to one of the most turbulent times in modern history. As the inquiry delved into the decisions made at the height of the pandemic, Sunak’s testimony painted a picture of frantic policymaking, immense uncertainty, and the balancing act between saving jobs and managing public finances.
Sunak, who served as chancellor when Covid-19 swept across the UK, was candid about the extraordinary pressures he faced. According to BBC, he acknowledged, “there was not a playbook” for the economic shock caused by Covid, and that ministers were “dealing with something no one had dealt with before.” With the country entering lockdown in March 2020, he was tasked with preventing mass unemployment and economic collapse, all while navigating a landscape of unknowns. “There was an enormous amount of uncertainty,” Sunak told the inquiry. “Policymakers and experts were unsure of the scale and duration of the virus and how the population would respond to any measures imposed by the government.”
Central to Sunak’s approach was the now-famous coronavirus job retention scheme, better known as furlough. Announced in March 2020, the scheme ran until September 2021 and cost the Treasury £70 billion. Its primary aim was to stave off a wave of job losses as entire sectors shut down. Sunak defended the scheme’s simplicity, arguing that it allowed the government to move quickly when speed was of the essence. “We could not let perfect be the enemy of the good,” he explained, emphasizing that “speed was paramount” in the government’s response. “We had to get things out fast.”
Sunak was frank about the scheme’s limitations. “It wasn’t going to be possible to save every single person’s job,” he admitted, echoing his earlier comments from December 2023, when he was still prime minister. Still, he expressed pride in the government’s efforts, noting, “the impact on living standards, particularly for the most vulnerable in society... were stronger than I would have perhaps anticipated going into this and I’m very proud of that.”
According to The Telegraph, Sunak also addressed the closure of the furlough scheme, which had been a source of anxiety for many. There were widespread fears that ending the scheme would trigger a spike in unemployment, with pressure from opposition parties and trade unions to keep it running. However, Sunak maintained that the government’s approach—tapering off support for employers as the scheme wound down—was “right.” Ultimately, the feared mass unemployment did not materialize, a fact Sunak cited as evidence of the policy’s success.
But these measures came at a steep price. The total cost of the government’s pandemic-related fiscal interventions exceeded £350 billion, with the £840 million Eat Out to Help Out scheme also drawing scrutiny. As Sunak told the inquiry, “I, as UK chancellor, had to stand up and make all these difficult decisions about raising taxes to pay for pandemic support because I thought that was the right thing to do to get our public finances back in order. I obviously didn’t love doing that, there’s a political price that comes with doing these things... but that was the right thing to do, I wanted to do it.”
Indeed, Sunak’s 2021 spring Budget included a freeze on income tax thresholds for four years, projected to increase tax receipts by £8.2 billion in 2025/26. The move drew criticism from both sides of the political spectrum, with some labeling it “un-Conservative” and others suggesting he had borrowed ideas from Labour’s 2019 manifesto. Reflecting on this, Sunak remarked, “I am by instinct and experience and everything else a fiscal conservative, right. That is what I believe. But this was a unique crisis and it required a particular response where the government did have to intervene and did have to do these things which I thought would be in the long-term best interests of the country.”
Sunak was also questioned about the government’s support for self-employed workers, a group that faced unique challenges during the pandemic. He conceded the scheme was imperfect, as applicants had to self-certify, but defended the decision: “It was right to support self-employed people and that I would do it again if in the same position.” He further argued that the support for the self-employed was more generous than it could have been otherwise.
One of the more striking moments of Sunak’s testimony came when he addressed the criticism that the government’s policies sometimes left people feeling left out. “That’s just life,” he said, accepting that tough decisions inevitably carry consequences for some. He also reiterated that the £20 boost to universal credit was always intended to be temporary, despite opposition to its removal.
Looking back on the early days of the pandemic, Sunak described the atmosphere as “existential,” with the government forced to make decisions in a vacuum of reliable information. He noted that medical officials initially advised against early intervention, fearing the public would not accept strict measures. “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 recalled.
As the inquiry continued, it became clear that the economic response to Covid-19 was shaped not just by economic theory, but by the realities of crisis management. Sunak’s testimony underscored the tension between his fiscal conservative instincts and the need for massive state intervention. “This isn’t a time for ideology,” he said. “No such thing as a free lunch.”
The inquiry has also been examining the broader context, including the government’s initial reluctance to take the virus seriously—a “lost month” in February 2020, as found by the inquiry last month. Sunak’s appearance comes as the UK continues to grapple with the long-term consequences of the pandemic, from public finances to the future of work.
With the benefit of hindsight, Sunak acknowledged the difficulty of striking the right balance. “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. But for now, he stands by his choices: “We were successful in preventing mass unemployment and the impact on jobs was considerably better than what anyone had forecast at the early stages of the pandemic.”
As the inquiry moves forward, the legacy of Sunak’s decisions—and the government’s broader pandemic response—will remain a subject of debate. But one thing is certain: the economic scars of Covid-19, and the lessons learned from those tumultuous months, will shape British politics and policy for years to come.
